On January 15, 2025, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk, alleging that he failed to disclose his stock ownership in Twitter in a timely manner. According to the SEC, Musk acquired over 5% of Twitter's shares in March 2022 but did not notify regulators within the required 10-day period.
The SEC claims that this delay allowed Musk to purchase additional shares at artificially low prices, resulting in an estimated underpayment of $150 million for his acquisitions. Musk reported owning more than 9% of Twitter on April 4, 2022, which was 11 days after the disclosure was due, at a time when Twitter's stock price surged by 27%.
The SEC emphasized that Musk's late disclosure deprived investors of the opportunity to make informed decisions, leading to significant financial losses for those who sold their shares during this period. The lawsuit seeks to recover the alleged amount underpaid, along with additional penalties.
Musk's attorney has countered that the billionaire did not commit any wrongdoing, suggesting that the SEC has been conducting a prolonged campaign against him. The future of the lawsuit remains uncertain, especially with the impending change in the U.S. presidential administration, as the SEC's current chair, Gary Gensler, is set to step down on January 20, 2025.
Musk completed the acquisition of Twitter in October 2022 for $44 billion, financing a significant portion of the purchase through the sale of Tesla shares and loans amounting to approximately $12 billion. Following the acquisition, he rebranded the platform to X.