SEC Files Lawsuit Against Elon Musk Over Share Purchase Violation

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of violating rules during his Twitter share purchase.

The SEC alleges that Musk failed to disclose his acquisition of more than 5% ownership within the required 10-day period. Instead, he disclosed it 21 days late, which the regulator claims caused significant financial harm to other investors and allowed Musk to buy shares at artificially low prices.

According to the SEC, Musk saved $150 million (approximately NPR 19 billion) from this delay. Twitter's share price surged by 27% on April 4, 2022, after Musk disclosed his ownership. Later that year, in October, Musk acquired Twitter and renamed it "X."

The SEC has requested the court to order Musk to return the undue gains and pay penalties.

In response, Musk criticized the SEC on social media, calling it a "broken institution" that "ignores real crimes." His attorney, Alex Spiro, described the lawsuit as "false and abusive" in an email to the BBC.

This is not Musk's first clash with the SEC. In 2018, the regulator accused him of misleading investors with claims about taking Tesla private, which led to a settlement requiring Musk to step down as Tesla's chairman.