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SEC is suing Elon Musk, accusing him of withholding information that cost Twitter investors millions

The Securities and Exchange Commission filed a lawsuit against Elon Musk on Tuesday, alleging the X owner misled shareholders about his 2022 Twitter stock purchases.

The lawsuit alleges that Musk violated federal securities laws, which allowed him to buy shares of Twitter at artificially low prices before his $44 billion acquisition of the social media site. Musk has called the SEC “just another weaponized institution doing political dirty work.”

Musk began buying shares of Twitter, which he later renamed X, in early 2022. By mid-March, he had acquired ownership of more than 5% of the company’s outstanding shares, according to the SEC filing. He was required to file a report with the SEC disclosing his purchases, but the lawsuit claims he failed to do so “in a timely manner,” causing him to underpay other investors at least $150 million for the shares they held during that period bought.

Musk waited until April 4, 2022, 11 days after the report was due, to publicly disclose his beneficial ownership in an SEC report, the committee says.

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“Investors who sold shares of Twitter common stock during this period did so at artificially low prices and suffered significant economic harm as a result,” the SEC said in its lawsuit.

The SEC says it wants the court to order Musk to pay “restitution for unjust enrichment resulting from his violation.” The SEC is also seeking civil penalties.

Musk responded to news of the lawsuit on Tuesday evening on X, calling the SEC a “totally broken organization.”

“They spend their time on this stuff when there are so many real crimes that go unpunished,” Musk wrote.

In a statement late Tuesday evening, Musk’s attorney, Alex Spiro, told CBS News that “today’s action is an admission by the SEC that… they cannot bring an actual case – because Mr. Musk has done nothing wrong and everyone sham for what it is. is.”

In July 2022, Musk tried to pull out of the deal to buy Twitter, but the company sued to hold him to their agreement, and he completed the takeover in October of that year.

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Musk has been in contact with the SEC before. The SEC filed a complaint in 2018 alleging that Musk misled Tesla investors. In 2023, the SEC said yes request a court order to force Musk to testify as part of his investigation into his purchase of X. He later testified for the research.

The SEC lawsuit comes shortly before Chairman Gary Gensler’s planned resignation from the commission. It is not clear whether the new government will pursue the case. President-elect Donald Trump has chosen Paul Atkins as the new head of the SEC.

Musk is one prominent Trump supporter And Republican donorand has been selected by Trump to lead the Department of Government Efficiency, or DOGE.

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