Elon Musk is facing demands from the Securities and Exchange Commission (SEC) to pay a fine or face charges related to his initial purchases of Twitter stock in 2022. Musk revealed this information on his social media platform, X, by sharing a letter from his attorney, Alex Spiro, to SEC Chairman Gary Gensler. The letter stated that the SEC gave Musk 48 hours to agree to pay the fine for failing to disclose his initial Twitter stock purchases or face numerous charges.
Musk mockingly responded on X with, “Oh Gary, how could you do this to me?”
The SEC, following agency policy, declined to comment on the ongoing investigation. Spiro’s letter alleged that SEC staff claimed the demand came from their superiors and that charges would be brought imminently if Musk did not comply. Musk has refused to agree to the demand.
Musk and the SEC have a history of conflicts, which have intensified in recent years as Musk has challenged the agency’s authority to limit his communications with investors. Gensler has been a vocal critic of cryptocurrencies, in which Musk is a major investor and advocate. The letter also mentioned that Spiro had been subpoenaed to give testimony, which he refused.
Musk defies SEC ultimatum over Twitter
It indicated that the SEC had reopened an investigation into Neuralink, another one of Musk’s companies. Spiro wrote, “This series of events makes clear that the commission is not motivated to seek the truth but is instead engaged in an improperly motivated campaign against Mr.
Musk and the individuals and companies associated with him.”
In 2018, the SEC reached a settlement with Musk and Tesla after finding that Musk had deceived investors by tweeting that he had “funding secured” to take Tesla private. Both Tesla and Musk paid $20 million fines, and Musk agreed to have his tweets about material events at the company approved by others at Tesla. He also gave up the title of chairman of Tesla but remained CEO.
In April 2022, Musk disclosed he had purchased 9% of Twitter’s shares before his full acquisition of the company later that year. The SEC sent him a letter asking why he had not disclosed those purchases within 10 days of crossing the 5% threshold, as required by securities law. Musk eventually bought all of Twitter’s shares in a $44 billion purchase and renamed the company X.
With the incoming administration of President-elect Donald Trump, Musk may not have to deal with a Gensler-led SEC much longer. Trump has nominated Paul Adkins, co-chairman of the crypto advocacy group Digital Chamber’s Token Alliance since 2017, to lead the agency.
Noah Nguyen is a multi-talented developer who brings a unique perspective to his craft. Initially a creative writing professor, he turned to Dev work for the ability to work remotely. He now lives in Seattle, spending time hiking and drinking craft beer with his fiancee.
