Musk Faces Lawsuit from US Finance Regulator for Purchasing Twitter Shares at Undervalued Prices | US News
Elon Musk is facing legal action for not promptly revealing his acquisition of over 5% of Twitter shares.
The richest person in the world acquired the shares in March 2022, and the US Securities and Exchange Commission (SEC) claims that the delay allowed him to purchase additional Twitter shares at artificially reduced prices.
Documents submitted in the federal court of Washington DC indicate that this delay resulted in Mr. Musk underpaying by at least $150 million (£123 million).
The SEC is seeking a civil penalty against Mr. Musk and demands that he relinquish profits that he improperly gained.
In response to the lawsuit, an attorney representing the billionaire stated: “Mr. Musk has committed no wrongdoing, and everyone recognizes this lawsuit for what it truly is.”
According to SEC regulations, investors must disclose within 10 calendar days upon exceeding a 5% ownership stake.
The SEC noted that Mr. Musk did not share his holdings until April 4, 2022, which was 11 days past the deadline—by that time, he had acquired over 9% of Twitter’s shares.
Following Mr. Musk’s announcement, Twitter’s share price surged by over 27%, the SEC reported.
In October 2022, Mr. Musk went on to purchase Twitter for $44 billion (£36 billion) and subsequently rebranded the platform as X.
Read more: Majority of public says Musk having a negative impact on British politics
Following Donald Trump’s election, Mr. Musk has been tasked with heading a newly established Department of Government Efficiency (DOGE) alongside former Republican presidential hopeful Vivek Ramaswamy.
The president-elect stated that the department aims to minimize governmental red tape, eliminate unnecessary regulations, reduce wasteful spending, and reorganize federal agencies.
