US: SEC sues Elon Musk for securities violation over X
January 15, 2025
The US Securities and Exchange Commission sued Elon Musk Wednesday for failing to disclose his acquisition of Twitter shares before buying the company.
The SEC said Elon Musk violated securities law by acquiring Twitter shares at "artificially low prices."
Musk bought Twitter in 2022 for about $44 billion (€42.7 billion), changing the name to X the following year.
What does the SEC say in its lawsuit?
The SEC alleged in the lawsuit that Musk committed securities fraud in 2022 by amassing an active stake in Twitter but withheld the information.
Before purchasing Twitter, Musk had built up a position in the company greater than 5% that would have required disclosing his holding to the public.
"Defendant Elon Musk failed to timely file with the SEC a beneficial ownership report disclosing his acquisition of more than five percent of the outstanding shares of Twitter's common stock in March 2022, in violation of the federal securities laws," the SEC said in a court filing.
The SEC said withholding that information allowed Musk "to underpay by at least $150 million for shares he purchased after his financial beneficial ownership report was due."
Musk's power in the Trump administration
The news comes a week before President-elect Donald Trump returns to the White House for a second term, with Musk as part of Trump's inner circle.
Musk is set to play a highly influential role in the new administration by leading an advisory body — but not a government agency — that will focus in part on reducing regulations.
Musk, who is CEO of Tesla and SpaceX, spent over a quarter of a billion dollars to groups supporting Trump's campaign in 2024.
rm/jsi (AFP, Reuters)