Islam Times - SEC Sues Elon Musk over Failure to Disclose Twitter Stake Purchase

Islam Times - The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of failing to disclose his acquisition of a Twitter stake, which allowed him to buy shares at "artificially low prices."

The SEC lawsuit claims that Tesla CEO Elon Musk saved $150 million (£123 million) in share purchases due to the delay in reporting his Twitter stock acquisition.

According to SEC rules, investors whose holdings exceed 5% must report the purchase within 10 days. Musk reportedly disclosed his acquisition 21 days after surpassing the threshold, the filing said.

In response to the lawsuit, Musk took to social media, calling the SEC a "totally broken organisation," and accused the regulator of focusing on insignificant matters while "actual crimes" go unpunished.

The SEC complaint further stated, "Musk's violation resulted in substantial economic harm to investors."

Musk's lawyer, Alex Spiro, described the lawsuit as a "sham" and a "campaign of harassment" against Musk in a statement sent to BBC News.

The SEC noted that Twitter's share price surged by over 27% after Musk’s purchase was made public on April 4, 2022. Later, in October 2022, Musk purchased Twitter for $44 billion and rebranded it as X.

The SEC filed the complaint in a Washington, DC federal court on Tuesday, also requesting that the court order Musk to return "unjust" profits and impose a fine.

Gary Gensler, the head of the SEC, announced in November his decision to resign when Donald Trump returns to the White House on January 20. Gensler’s resignation followed Trump’s statement about firing him on "day one" of his new administration.

The SEC’s conflict with Musk has a long history, dating back to 2018, when Musk was charged with defrauding investors after claiming he had "funding secured" to take Tesla private. He later settled, stepping down as Tesla's chairman and agreeing to restrictions on his social media posts regarding the company.