The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that he failed to properly disclose his ownership of Twitter stock in 2022, which allowed him to purchase shares at "artificially low prices." The SEC claims Musk amassed more than a 5% stake in Twitter without timely filing the required disclosure, which is legally mandatory when an investor crosses that ownership threshold. This delay, according to the SEC, resulted in Musk underpaying for Twitter shares by at least $150 million. Musk eventually bought Twitter for $44 billion and later renamed it X.
The lawsuit comes after a history of friction between Musk and the SEC, including previous legal actions stemming from Musk's tweets about Tesla. Musk's attorney, Alex Spiro, has called this lawsuit a "sham" and a "ticky tak complaint," suggesting that it's an administrative oversight that, even if proven, would only carry a nominal penalty. The lawsuit was filed in the context of Musk's significant political clout and his role in the incoming administration of President-elect Donald Trump, where he is set to co-head a new entity called the Department of Government Efficiency.
This legal action is part of a broader narrative of regulatory scrutiny on Musk's business dealings and public statements. Current SEC Chairman Gary Gensler is stepping down, and it remains uncertain whether the incoming SEC leadership will continue to pursue this case. Posts on X reflect a mix of opinions, with some users viewing the lawsuit as another example of regulatory overreach against Musk, while others see it as a necessary enforcement of securities laws.