Billionaire Elon Musk Faces SEC Lawsuit Over Twitter Stock Disclosure
In a high-stakes legal battle, the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of failing to disclose his ownership of Twitter stock in a timely manner. This alleged oversight allowed Musk to underpay for shares by at least $150 million, according to the SEC.
The Timeline of Events
Musk began accumulating Twitter shares in early 2022, and by March of that year, he had surpassed the 5% ownership threshold. At this point, he was legally required to disclose his ownership, but he failed to do so until April 4, 11 days after the report was due.
SEC Allegations
The SEC claims that Musk’s failure to disclose his ownership led to a significant financial advantage, allowing him to purchase shares at a lower price. This alleged administrative failure to file a single form could result in a nominal penalty, but the implications are far-reaching.
Musk’s Defense
Musk’s lawyer, Alex Spiro, has dismissed the lawsuit as a “sham” and an “admission by the SEC that they cannot bring an actual case.” Spiro argues that Musk has done nothing wrong and that the SEC’s multi-year campaign of harassment has culminated in a single-count complaint.
A Complex History
This lawsuit is not the first time Musk has faced legal challenges related to Twitter. In April 2022, he signed a deal to acquire the social media platform, only to try to back out of it later. Twitter was forced to sue Musk to compel him to follow through with the acquisition.
Ongoing Investigation
The SEC has been investigating Musk’s purchases of Twitter stock and his statements and SEC filings related to the company since April 2022. The agency even went to court to compel Musk to testify as part of the investigation.
Uncertainty Ahead
With SEC Chair Gary Gensler set to step down on January 20, it remains unclear whether the new administration will continue to pursue the lawsuit against Musk. One thing is certain, however: this high-profile legal battle will have significant implications for the business world and beyond.
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