KEY TAKEAWAYS
- The Securities and Exchange Commission sued Tesla CEO Elon Musk for allegedly delaying a disclosure of a stake in Twitter—allowing him to “underpay by at least $150 million for shares he purchased after his beneficial ownership report was due.”
- The regulator said that by March 14, 2022, Musk had a greater than 5% stake in Twitter and didn’t disclose it within the 10-day time frame required.
- In a statement to Investopedia, Musk’s lawyer said the billionaire had “done nothing wrong.”
The Securities and Exchange Commission (SEC) sued Tesla (TSLA) CEO Elon Musk for allegedly delaying a disclosure of a stake in Twitter in early 2022—allowing him to “underpay by at least $150 million for shares he purchased after his beneficial ownership report was due.”
The regulator said that by March 14, 2022, Musk had a greater than 5% in Twitter and didn’t disclose it within the 10-day time frame required to put in a 13D filing. Musk only disclosed the stake on April 4, 2022, the SEC said, on which day the shares spiked by more than 27%.
That delayed disclosure allowed Musk to buy more than $500 million in added Twitter stock at “artificially low prices,” the SEC said. Musk completed his roughly $44 billion purchase of Twitter, since renamed X, in October 2022.
‘Musk Has Done Nothing Wrong,’ Lawyer Says
In a statement to Investopedia, Musk’s lawyer Alex Spiro, a partner at Quinn Emanuel, said the regulator’s lawsuit was “an admission by the SEC that they cannot bring an actual case.”
“Mr. Musk has done nothing wrong and everyone sees this sham for what it is,” Spiro added.
