Jan. 14 (UPI) — The U.S. Securities and Exchange Commission is suing Elon Musk for allegedly failing to properly disclose his purchase of Twitter shares before buying the company, currently known as X.
The SEC filed the lawsuit Tuesday, less than a week before President-elect Donald Trump’s inauguration and Musk’s new role as co-leader of the proposed Department of Government Efficiency, or DOGE, presidential advisory committee.
According to the lawsuit, Musk purchased a “significant number” of Twitter shares before he paid $44 billion to buy Twitter in October 2022. Musk is accused of failing to disclose to the SEC, within 10 calendar days, that he owned more than 5% of the company’s stock by March 2022.
Musk disclosed that he had purchased more than $500 million worth of Twitter common stock by April 4, 2022, when he owned more than 9% of the company and announced he would join Twitter’s board.
According to the complaint filed in federal court in Washington, D.C., Musk “underpaid Twitter investors by more than $150 million for his purchases of Twitter common stock during this period.”
Once Musk disclosed his stake in the company, “Twitter’s stock price increased more than 27%,” according to the lawsuit.
By October 2022, Musk had backed out of Twitter’s board seat and ended up purchasing the company outright.
The SEC complaint is requesting Musk, who also owns SpaceX and Tesla, turn over his “unjust” profits and pay unspecified civil penalties.
Musk’s attorney called the case a “single-count ticky tak complaint,” claiming Musk has “done nothing wrong.”
“Today’s action is an admission by the SEC that they cannot bring an actual case — because Mr. Musk has done nothing wrong and everyone sees this sham for what it is,” Musk’s attorney Alex Spiro said in a statement.
“The SEC’s multi-year campaign of harassment against Mr. Musk culminated in the filing of a single-count ticky tak complaint against Mr. Musk under Section 13(d) for an alleged administrative failure to file a single form — an offense that, even if proven, carries a nominal penalty.”
