SEC Files Lawsuit Against Elon Musk

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of failing to disclose that he had acquired a significant stake in Twitter, allowing him to purchase shares at “artificially low prices” and saving $150 million in the process.

According to SEC regulations, investors must report when their holdings surpass 5%, and they have 10 days to do so. Musk reportedly filed his disclosure 21 days after surpassing that threshold, violating these rules.

In response, Musk called the SEC “a totally broken organisation” and criticized the regulator for focusing on him rather than addressing “actual crimes.” He also expressed his belief that the lawsuit was part of a “campaign of harassment” against him, according to his attorney, Alex Spiro.

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The SEC claims that Musk’s actions harmed investors and that his failure to disclose the stake led to a rise in Twitter’s share price by over 27% after his purchase was made public on April 4, 2022. Musk eventually bought the social media platform for $44 billion in October 2022, rebranding it as X.

The SEC’s complaint, filed in Washington D.C. on Tuesday, requests that Musk relinquish “unjust” profits and pay a fine. This lawsuit is just the latest chapter in Musk’s long-running disputes with the SEC, which began in 2018 when he faced charges over misleading investors about taking Tesla private.

As SEC Chairman Gary Gensler prepares to step down in January 2025, following Trump’s planned return to the White House, the battle between Musk and the SEC continues to unfold.

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