The U.S. Securities and Exchange Commission (SEC) has sued Elon Musk in federal court in Washington. The lawsuit alleges that Musk violated securities laws by amassing a substantial stock position in Twitter without filing the necessary notification. According to the complaint, Musk delayed 11 days before making the required disclosure with the SEC.
This allowed him to continue buying Twitter stock at an artificially low price. The lawsuit claims he “underpaid by at least $150 million” for additional shares before finally disclosing his stake. The SEC charges were made public on Tuesday night, just days before SEC Chair Gary Gensler’s tenure ends on Jan.
20. Gensler and Musk have clashed over various issues related to Tesla in the past.
Sec sues Musk over Twitter stock
Many in the financial and legal communities argue that this case is more about political maneuvering than legal enforcement. There is speculation that Musk’s political affiliations and his role in the new administration might have influenced the decision to bring the charges at this time. Alex Spiro, a lawyer for Musk, dismissed the SEC’s case as baseless.
He stated in an emailed statement that the lawsuit amounted to “an admission” by the agency that it had no substantive case. “Musk has done nothing wrong and everyone sees this sham for what it is,” Spiro said. This is not the first time the SEC has scrutinized Musk’s dealings.
In 2021, the agency investigated Musk and his brother, Kimbal Musk, for alleged securities fraud and insider trading violations related to Tesla stock sales. The outcome of the lawsuit remains to be seen, but it adds another chapter to the ongoing legal battles between Elon Musk and the SEC.
April Isaacs is a news contributor for DevX.com She is long-term, self-proclaimed nerd. She loves all things tech and computers and still has her first Dreamcast system. It is lovingly named Joni, after Joni Mitchell.
