Elon Musk hit with SEC lawsuit for delayed Twitter stock disclosure in 2022
Business & Economy | World | SEC's claims that Elon Musk's late filing allowed him to buy Twitter shares at reduced prices, leading to an alleged underpayment of $150 million.
Elon Musk has been sued by US regulator Securities and Exchange Commission (SEC) with regards to his acquisition of Twitter, the social media platform he subsequently renamed X. In a filing published on Tuesday (Jan 14), the SEC accused him of violating federal securities laws during his 2022 purchase of Twitter shares.
SEC allegations against Musk
"Defendant Elon Musk failed to timely file with the SEC a beneficial ownership report disclosing his acquisition of more than five per cent of the outstanding shares of Twitter's (renamed as X) common stock in March 2022, in violation of the federal securities laws," said the agency in a court filing.
This omission, as per SEC, allowed Musk to continue purchasing shares at "artificially low prices".
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Musk, the world's richest man and US president-elect Donald Trump's close ally, underpaid "by at least $150 million for shares he purchased after his beneficial ownership report was due," it alleged.
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Musk purchased Twitter in October 2022 and proceeded to rebrand it to X in July 2023. His time at the social media platform's helm has been marked with controversies and has even led to a number of legal actions on the part of investors, former employees and companies that had contracts with Twitter.
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While former employees have sued him over wrongful termination, shareholders have filed a lawsuit against Musk, accusing him of disclosing his five per cent stake in Twitter too late, after the deadline set by the SEC.
(With inputs from agencies)
