US SEC sues Musk over Twitter acquisition
15/01/2025
The SEC claims that Musk started buying Twitter stock in early 2022 and surpassed the five percent limit on March 14, 2022. - File image
WASHINGTON: The United States Securities and Exchange Commission (SEC) on Tuesday announced that it is suing tech billionaire Elon Musk, alleging that he failed to accurately declare his ownership of over five percent of Twitter shares before taking over the company in 2022, the German news agency (dpa) reported.
The SEC claims that Musk started buying Twitter stock in early 2022 and surpassed the five percent limit on March 14, 2022. By law, he was supposed to declare the fact publicly within 10 calendar days, but he did not announce that he had held nine percent of the company until April 4, which is 11 days late, the SEC said.
According to SEC filings, Twitter's stock price jumped 27 percent after the declaration. The agency analyzed Musk's purchase and concluded that he "underpaid at least US$150 million for the purchase of Twitter's common stock during that period." Shareholders who sold their shares to Musk during that period reportedly suffered financial losses, the lawsuit alleges.
The SEC demanded that Musk pay back the amount — plus an additional fine.
Musk's lawyer, Alex Spiro, dismissed the allegations by stating that the tech billionaire "did nothing wrong." In a statement to Bloomberg financial services, he also mentioned the "multi-year harassment campaign" by the SEC against Musk.
It is unclear how the lawsuit will proceed. Musk is a confidant of Donald Trump, who will be sworn in as the new US president on Jan. 20.
Serving SEC Chairman Gary Gensler has announced that he will resign.
Musk bought Twitter in October 2022 for US$44 billion. He later changed the name of the online platform to X.
