Elon Musk sued by US markets regulator over Twitter stake disclosure
15 January 2025, 11:24
The US Securities and Exchange Commission said the billionaire failed to properly disclose the stake he had in Twitter before he bought the site.
The US markets regulator has filed a lawsuit against Elon Musk, alleging he failed to properly disclose the stake he had amassed in Twitter before buying the platform, allowing him to buy shares at lower prices.
The Securities and Exchange Commission (SEC) said in its filing that the Tesla boss saved around 150 million dollars (£123 million) in share purchases as a result of his actions.
Under SEC rules, investors must report within 10 days when their holdings in a company surpass 5% – the SEC’s filing says Mr Musk did not report until 21 days after going beyond that threshold.
The US regulator said Mr Musk’s “violation” had resulted in “substantial economic harm to investors” and in its filing asked the court to order Mr Musk to pay a fine and return “unjust” profits.
The SEC said Twitter’s share price rose by more than 27% after the Tesla boss made his share purchase public in April 2022 – he would go on to buy Twitter for 44 billion dollars in October that year, and has since renamed the platform X.
In a post to X responding to the SEC, Mr Musk said the SEC was a “totally broken organisation” and accused it of wasting time going after him when “there are so many actual crimes that go unpunished”.
The Tesla billionaire could soon have a say over the running of the SEC when he begins his role as an adviser to US President-elect Donald Trump as part of the newly created Department of Government Efficiency (Doge), which has been tasked with trimming the US federal budget.
The new department will sit outside government but will offer guidance to the Trump White House, with Mr Musk leading it alongside former Republican presidential candidate Vivek Ramaswamy.
