SEC sues Elon Musk

SEC sues Elon Musk: allegations of concealing information and $150m damages

Regulator accuses entrepreneur of deceiving Twitter shareholders

The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of violating disclosure rules and causing more than $150 million in damages to Twitter (now X) shareholders.

Delayed disclosure of the deal

According to the SEC, Musk violated the law by delaying the disclosure of his initial purchase of 5% of Twitter’s shares by more than 10 days. Under the requirements, he was required to file the corresponding beneficial ownership report immediately after reaching this threshold.

The delay allowed the entrepreneur to continue buying up the company’s shares at a lower price, which, according to the SEC, gave him an unlawful advantage.

«Эта задержка позволила Маску избежать дополнительных затрат в размере не менее 150 миллионов долларов за акции, которые он приобрел после истечения срока подачи отчета» (This delay allowed Musk to avoid additional costs of at least $150 million for the shares he acquired after the report filing deadline had passed), the regulator’s lawsuit states.

How this affected investors

Had information about Elon Musk’s acquisition of a significant stake in Twitter become known in a timely manner, the market might have reacted to the news with a rise in the share price. In the SEC’s view, investors were deprived of the opportunity to act with full market information, which violated their rights and distorted market pricing.

Musk under fire from the SEC

This lawsuit is the latest episode in a series of conflicts between Elon Musk and US regulators. Previously, the SEC had already held him accountable for statements on Twitter related to Tesla and accused him of violating market manipulation rules.

Musk himself has not yet commented on the new allegations. Experts expect the case could drag on for months, or even years, given that Musk has repeatedly demonstrated a willingness to vigorously defend his positions in court.

Consequences for the entrepreneur

If the SEC succeeds in proving its case, it could lead not only to financial sanctions for Musk but also to increased oversight of his future actions in the securities market.