SEC sues Ilon Musk for not timely disclosing information about Twitter purchase
By ForGeeks The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Ilon Musk, accusing him of delaying disclosure of his purchase of Twitter stock. The investigation has lasted more than two years and concerns events leading up to Musk’s intention to acquire the company in 2022.
Twitter’s acquisition of Twitter’s stock is now under investigation.
Data Filing Violation
According to an SEC filing, Musk violated a federal law that requires investors to publicly announce the acquisition of more than 5% of a company’s stock. Musk filed the relevant documents 11 days later than the deadline, allowing him to continue buying Twitter stock at an undervalued price.
Musk’s filing was 11 days late, allowing him to continue buying Twitter stock.
Text from the lawsuit
The SEC’s lawsuit states:
“During the period when Musk was supposed to disclose his stake but failed to do so, he spent more than $500 million to purchase additional shares of Twitter stock. Because Musk did not disclose his stake in a timely manner, he was able to purchase shares from unsuspecting investors at artificially low prices that did not reflect important information about his involvement and investment objectives.”
The regulator estimated that Musk underpaid Twitter investors more than 150 million dollars, and that investors who sold shares during that period suffered significant economic harm.
The regulator also estimated that Musk underpaid Twitter investors more than 150 million dollars and that investors who sold shares during that period suffered significant economic harm.
The SEC and Musk’s conflict
This is far from the first conflict between the SEC and Musk:
- The regulator has previously accused Musk of trying to delay the investigation and using “games” to delay the release of data.
- Musk, in turn, accused the SEC of years of “harassment” and refused a proposed settlement in the Twitter case.
Musk’s lawyer, Alex Spiro, called the lawsuit a “frivolous claim” and said it was “an admission by the SEC of its failure to make a real case.”
Additional Legal Complexities
Musk is also facing a class action lawsuit from Twitter investors and an FTC investigation related to delayed disclosures. However, according to The New York Times, the prospects for a new SEC lawsuit remain unclear, especially amid the possible departure of SEC Chairman Gary Gensler after the inauguration of a new president.
The New York Times reports that the SEC’s prospects for a new lawsuit remain unclear, especially amid the possible departure of SEC Chairman Gary Gensler after the inauguration of a new president.
