Elon Musk is being sued by the feds over the way he bought Twitter
Illustration by Kristen Radtke / The Verge; Getty Images Elon Musk’s acquisition of Twitter has resulted in a federal lawsuit by the Securities and Exchange Commission alleging that he broke securities laws with a late disclosure, and saved $150 million in the process. It all starts before Musk agreed to buy Twitter for $44 billion, before he tried to back out of that deal, before he was forced to go through with it, and before he changed its name to X, when he acquired a substantial stake by buying shares of the company on the open market. The only problem, as the SEC pointed out at the time, is that by the time he disclosed that stake, it was outside the agency’s required 10-day window. They claim that he should’ve filed his paperwork by March 24th, 2022, instead of when he actually did, on April 4th (and then again on April 5th). During that period, they say he purchased more than $500 million in shares of the company. However, with only a few days left before the Trump administration takes over and installs a new head of the SEC (along with Elon Musk reportedly snagging an office in the White House complex), it’s unclear how far the lawsuit will go. The SEC claims Musk cost investors at least $150 million due to the late disclosure and that he harmed any investors who sold stock between March 25th, 2022, and April 1st, 2022. Its lawsuit is seeking the money Elon made as a result of holding off on the disclosure, as well as a civil penalty and other punishments.
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Elon Musk’s acquisition of Twitter has resulted in a federal lawsuit by the Securities and Exchange Commission alleging that he broke securities laws with a late disclosure, and saved $150 million in the process.
It all starts before Musk agreed to buy Twitter for $44 billion, before he tried to back out of that deal, before he was forced to go through with it, and before he changed its name to X, when he acquired a substantial stake by buying shares of the company on the open market.
The only problem, as the SEC pointed out at the time, is that by the time he disclosed that stake, it was outside the agency’s required 10-day window. They claim that he should’ve filed his paperwork by March 24th, 2022, instead of when he actually did, on April 4th (and then again on April 5th). During that period, they say he purchased more than $500 million in shares of the company.
However, with only a few days left before the Trump administration takes over and installs a new head of the SEC (along with Elon Musk reportedly snagging an office in the White House complex), it’s unclear how far the lawsuit will go.
The SEC claims Musk cost investors at least $150 million due to the late disclosure and that he harmed any investors who sold stock between March 25th, 2022, and April 1st, 2022. Its lawsuit is seeking the money Elon made as a result of holding off on the disclosure, as well as a civil penalty and other punishments.
