Elon Musk at the center of an SEC lawsuit

Billionaire Elon Musk is facing a lawsuit from the US Securities and Exchange Commission for failing to meet the legal deadlines imposed for disclosing the shares of X that he had recently acquired as part of his Twitter purchase.

Before finalizing the acquisition of Twitter for 44 billion dollars in October 2022, Musk had begun acquiring a significant volume of shares in the company.

By mid-March 2022, he held over 5% of the common shares, legally obliging him to inform the SEC within 10 days, by the end of March.

Musk only revealed his stake in Twitter in April 2022 after increasing it to 9.2%, making him the main shareholder of the platform. During this time, he acquired 500 million dollars worth of shares.

This delay in disclosure allowed him to purchase these shares at reduced prices, resulting in an estimated loss of 150 million dollars for Twitter investors.

In April 2022, when Musk finally disclosed his stake in Twitter, the stock price surged by 27%, increasing the company’s market value by 8 billion dollars.

The complaint claims that if he had declared his stake on time, the stock price would have risen sooner, making his purchases more expensive.

Alex Spiro, Musk’s attorney, rejected the accusations, calling the lawsuit “harassment.”

He described the matter as a simple administrative oversight related to the filing of a form and stated that even if the allegation were true, it would only lead to a minor penalty.

The SEC alleges that Elon Musk intentionally delayed disclosing his stake, which it claims would have indirectly manipulated the stock price.

This omission would have allowed him to save millions of dollars at the expense of existing investors.