Elon Musk Sued Over Failure To Disclose Stocks Before Buying Twitter

The US Securities and Exchange Commission (SEC) has filed a lawsuit against billionaire Elon Musk, claiming that he neglected to promptly reveal his Twitter stock holding in early 2022 before purchasing the social media platform.

Consequently, the SEC claims that Mr. Musk was able to underpay “by at least $150 million” (€145 million) for shares he purchased after failing to report that he owned more than 5% of Twitter’s stock. After acquiring Twitter in October 2022, Mr. Musk rebranded it as X.

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The internet millionaire began accumulating Twitter shares in early 2022, and by March of the same year, he held over 5% of the company.

According to the complaint, he was legally obligated to reveal his ownership at this time, but he didn’t do so until April 4th, 11 days after the report was due.

A query for comment was not immediately answered by X and Mr. Musk’s representatives. In April 2022, Mr. Musk signed an agreement to buy Twitter, but when he attempted to back out, the company sued him to make him complete the deal.

The SEC stated that in April 2022, it authorized an inquiry to see whether any securities laws were violated in relation to the acquisition of Twitter stock, as well as Mr. Musk’s remarks and SEC filings concerning the business.

To force Mr. Musk to testify as part of an investigation into his acquisition of Twitter, the SEC went to court before filing the case. Gary Gensler, the chairman of the SEC, is scheduled to leave his position on January 20. It is unclear if the lawsuit would be pursued by the incoming administration.