Elon Muskon was sued by the SEC on Tuesday, claiming that the billionaire committed securities fraud in 2022 by purchasing shares at inflated prices and neglecting to declare his ownership of Twitter.
Musk, the CEO of SpaceX and Tesla, paid $44 billion to acquire Twitter, which he eventually rebranded as X. He had amassed more than 5% of the company before the acquisition, which would have forced him to reveal his holdings to the public.
Musk was able to underpay by at least $150 million for shares he bought after his financial beneficial ownership report was due because he failed to comply with disclosure regulations, according to the SEC lawsuit.
As the CEO of Tesla sold shares of his auto firm and increased his interest in Twitter in 2022 before his leveraged takeover, the SEC was looking into whether Musk or anyone else he was dealing with had committed securities fraud. In a post on X last month, Musk claimed that the SEC had sent him a settlement notice, threatening to charge him on many crimes related to the purchase of shares unless he agreed to a deal that included a fine within 48 hours.
In an emailed statement, Musk’s attorney, Alex Spiro, stated that the action is an acknowledgment by the SEC that they are unable to file a formal case. He went on to say that Musk has done nothing wrong and described the lawsuit as a hoax that stems from a harassment campaign that lasted for years and ended with a single-count ticky tat complaint.
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With the start of President-elect Donald Trump’s second term on January 20, Musk is only a week away from potentially playing a significant role in government. Musk is positioned to head an advisory committee that will prioritize lowering regulations, particularly those that impact Musk’s numerous businesses. Musk was a significant financial supporter of Trump in the final months of the campaign.
Trump promised to fire Gary Gensler, the head of the SEC, in July. Instead, Gensler said that he would be leaving his position following Trump’s election triumph.
The Oklahoma Firefighters Pension and Retirement System filed a separate civil case against Musk in connection with the Twitter deal, alleging that he purposefully concealed his growing investments in the social network and his intention to acquire the business. The lawyers for the pension fund contended that Musk had affected and disadvantageously positioned other shareholders by not disclosing his investments in a transparent and understandable manner.
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