SEC Sues Elon Musk for Hiding Twitter Shares Purchase from Investors

The SEC claims Elon Musk misled investors by not disclosing his Twitter share purchase

SEC Sues Elon Musk for Hiding Twitter Shares Purchase from Investors
SEC Sues Elon Musk for Hiding Twitter Shares Purchase from Investors

Washington: The SEC is going after Elon Musk, saying he cheated investors out of $150 million. They claim he didn’t reveal his 2022 purchase of 10% of Twitter shares, which he was legally required to do.

Back in spring 2022, Musk’s secret buying spree came to light when he finally disclosed he owned nearly 10% of Twitter. But he had been quietly scooping up shares for weeks, keeping it under wraps to avoid driving up the price.

The SEC argues that this lack of disclosure hurt the people who sold their shares to Musk at lower prices. If they had known he was buying, the stock price would have shot up.

Now, as the Biden administration winds down, the SEC is suing Musk for not reporting his Twitter stock purchases on time. They say he took advantage of unsuspecting sellers, causing them financial harm.

The SEC is looking for a hefty $200 million settlement from Musk, which is a lot more than the $20 million he had to pay in a previous case back in 2018. That time, he got in trouble for a misleading tweet about taking Tesla private.

Musk’s lawyer, Alex Spiro, claims the SEC is just targeting his famous client. He argues that the lawsuit is over a minor paperwork issue that shouldn’t carry such serious consequences.

With Musk now aligned with Trump, there’s speculation that this lawsuit could be dismissed once Trump takes office. Trump has already chosen a new SEC chair who might be more lenient on Musk.

Interestingly, while Musk paid a high price of $54.20 per share for Twitter, those who sold to him earlier at lower prices feel cheated. They’re currently pursuing their own class action lawsuit against him.

Disclaimer: All images comply with fair use for educational and informational purposes. Sourced from public platforms. Have questions? Contact us.
Fact-Checking Policy: Accurate information is our focus. If errors are found, please let us know, and corrections will be made swiftly.