US SEC sues Musk for hiding Twitter stake

The US Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk on Tuesday, alleging that he violated federal securities laws by delaying the disclosure of his 2022 purchase of a significant Twitter stake.
Allegations against Musk
According to the SEC’s complaint, filed in Washington federal court, Musk waited 11 days beyond the regulatory deadline to disclose that he had acquired 5% of Twitter’s common shares. Under SEC rules, investors are required to disclose such stakes within 10 calendar days of crossing the threshold—by March 24, 2022, in Musk’s case.
The SEC claims Musk continued buying Twitter shares, acquiring more than $500 million worth at prices kept artificially low due to his nondisclosure. By the time he revealed his 9.2% stake on April 4, 2022, Twitter’s share price surged over 27%, allegedly causing losses for unsuspecting investors.
The lawsuit seeks civil penalties and disgorgement of "unjust profits" from Musk.
Musk’s response
Alex Spiro, Musk’s attorney, dismissed the lawsuit as the SEC’s "culmination of a multi-year campaign of harassment." Spiro characterized the case as addressing an "alleged administrative failure" with negligible penalties, asserting Musk had done nothing wrong.
Musk, who acquired Twitter (now rebranded as X) for $44 billion in October 2022, has a history of contentious interactions with the SEC, including a 2018 lawsuit over misleading tweets about taking Tesla private. That case was settled with a $20 million fine and restrictions on Musk’s use of social media regarding Tesla.
Broader context
This lawsuit is part of ongoing litigation concerning Musk’s delayed disclosure. Former Twitter shareholders have also sued Musk in Manhattan federal court, claiming his actions defrauded investors. Musk has argued that the delay was unintentional and that there was no intent to mislead shareholders.
Musk’s ongoing disputes with the SEC include a recent investigation into his conduct surrounding Twitter’s acquisition. Despite the legal challenges, Musk, with a net worth of $417 billion according to Forbes, remains the world’s wealthiest person, surpassing Amazon founder Jeff Bezos.
SEC leadership transition
The lawsuit comes as SEC Chair Gary Gensler prepares to step down, with Trump-nominated Paul Atkins expected to review enforcement actions initiated under Gensler.