The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of failing to disclose his significant stake in Twitter in a timely manner, which allegedly allowed him to purchase shares at “artificially low prices.”
The SEC claims Musk saved $150m (£123m) by delaying disclosure of his holdings, violating rules that require investors to report when their stake surpasses 5% within 10 days. Musk disclosed his stake 21 days late, the filing states.
In response, Musk criticized the SEC as a “totally broken organization” and accused it of neglecting “actual crimes.” His lawyer, Alex Spiro, called the lawsuit a “sham” and a “campaign of harassment.”
The SEC alleges Musk’s actions caused “substantial economic harm to investors.” Twitter’s share price surged over 27% when Musk’s stake became public on April 4, 2022.
Musk eventually purchased Twitter for $44bn in October 2022 and rebranded it as X. The SEC is seeking a court order for Musk to surrender “unjust” profits and pay fines.
The lawsuit was filed in a Washington, DC federal court on Tuesday.
The SEC, led by Gary Gensler, has frequently clashed with Musk, including during a 2018 case over misleading tweets about taking Tesla private. Gensler plans to step down in January after President-elect Donald Trump, a Musk ally, vowed to replace him on his first day in office.
