n Tuesday, the SEC completed a lawsuit against Elon Musk, bringing severe allegations against the billionaire, accusing him of security fraud in 2022.
The allegations surround Musk's failure to disclose that he had amassed an active stake in Twitter, thus leading him to buy shares at “artificially low prices.
Twitter was purchased by Musk in 2022 for $44 billion, and it changed its name to X only one year later. However, prior to the purchase, Musk already had built up a powerful position in the company, greater than 5%, meaning that he would have been required to disclose his holdings to the public within 10 calendar days to make the threshold.
The civil complaint filed by the SEC in the US District Court in Washington, D.C., mentions that Musk was 10 days late reporting the material information, “allowing him to underpay by at least $150 million for shares he purchased after his financial beneficial ownership report was due.”
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The SEC had been looking into whether or not Musk or the ones working for him had committed securities fraud in 2022 around the Twitter disclosures. Even more so, on a post on X that the SEC issued a “settlement demand” pressuring him to agree to a deal also including a fine within 48 hours “face charges on numerous counts” concerning the purchase of shares.
Even more so, Musk’s lawyer, Alex Spiro, said in a statement that was emailed this Tuesday that “they cannot bring an actual case.”. He also added that he “has done nothing wrong” and called the suit a “sham” and the result of a “multi-year campaign of harassment,” in a “single-count ticky tak complaint.”.
Yet an SEC spokesperson did not comment on the matter “beyond the litigation release and the complaint, which is, literally, an actual case brought by the SEC”. In a post from X after the complaint was filed, Musk called the SEC a “totally broken organization” saying that they are focusing “on s--- like this when there are so many actual crimes that go unpunished.”.
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