Elon Musk is facing a lawsuit for not promptly revealing his acquisition of over 5% of Twitter shares.
The wealthiest individual globally procured the shares in March 2022, and the allegation by the US Securities and Exchange Commission (SEC) asserts that the delay permitted him to keep buying Twitter stock at artificially diminished prices.
In documents submitted to a federal court in Washington DC, the SEC claimed that this maneuver enabled Mr. Musk to underpay by a minimum of $150 million (£123 million).
The commission is seeking a civil penalty from Mr. Musk and demands he relinquish unauthorized profits.
In reaction to the lawsuit, a legal representative for the billionaire stated: “Mr. Musk has committed no wrongdoing, and everyone recognizes this farce for what it truly is.”
An SEC regulation mandates that investors disclose their status within 10 calendar days upon reaching a 5% ownership level.
The SEC indicated that Mr. Musk did not reveal his holdings until April 4, 2022, which was 11 days past the deadline—by then, he had acquired over 9% of Twitter’s shares.
Following Mr. Musk’s revelation, Twitter’s share price surged by more than 27%, as noted by the SEC.
Mr. Musk subsequently purchased Twitter for $44 billion (£36 billion) in October 2022 and rebranded the platform as X.
Read more: Majority of public says Musk having a negative impact on British politics
Since Donald Trump’s election, Mr. Musk has been appointed to lead a newly established Department of Government Efficiency (DOGE) alongside former Republican presidential contender Vivek Ramaswamy.
The president-elect stated that the department aims to streamline government processes, cut unnecessary regulations, eliminate wasteful spending, and reorganize federal agencies.
