The Securities and Change Fee (SEC) is accusing Elon Musk of underpaying for Twitter by at the least $150 million when he bought it for $44 billion in 2022 and later rebranded it to X in 2023. Now Musk is taking to the exact same platform beneath scrutiny, X, to push again towards the SEC’s allegations.
In a grievance filed towards Musk on Tuesday within the U.S. District Courtroom for the District of Columbia, the SEC alleges that Musk achieved a big Twitter inventory place with out filling out the correct paperwork in time.
Musk amassed a stake in Twitter of better than 5% of excellent shares by March 14, 2022, however allegedly did not report his possession standing to the SEC inside 10 calendar days, or by March 24, 2022.
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In keeping with the grievance, he waited eleven days after the deadline to file the report.
Elon Musk. Picture by Allison Robbert-Pool/Getty Pictures
When Musk was allegedly delaying submitting the paperwork, he purchased $500 million value of Twitter inventory. The SEC accused Musk of shopping for inventory “at artificially low costs from the unsuspecting public” by understanding that if the general public knew about his stake, Twitter’s inventory value would possibly go up and he may very well be required to pay extra for a similar variety of shares.
Musk filed the SEC kind on April 4, 2022, and Twitter’s inventory value jumped by greater than 27%. By not submitting a report with the SEC by the date he was required to, the SEC estimated that Musk underpaid when shopping for Twitter by at the least $150 million.
“Had Musk publicly disclosed his Twitter holdings by submitting a helpful possession report with the SEC by March 24, 2022, as required, Twitter’s inventory value would doubtless have elevated considerably at that time, as an alternative of on April 4, 2022,” the SEC’s grievance reads.
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The SEC requested for Musk to pay a civil penalty in addition to “disgorgement of his unjust enrichment.”
Elon Musk Responds to the SEC
In a publish on X on Tuesday, Musk criticized the SEC, calling it a “completely damaged group.”
“They spend their time on s— like this when there are such a lot of precise crimes that go unpunished,” he wrote.
Musk additionally wrote on Wednesday that “lawfare must cease,” and accused Democrats of taking authorized motion towards residents as an alternative of “combating actual crime.”
Lawfare must cease.
As an alternative of combating actual crime, beneath the Democrats, residents are prosecuted, whereas severe criminals run free.
The truth is most of the criminals are within the authorities. No less than for one more 5 days. https://t.co/XpDgXNt8zI
— Elon Musk (@elonmusk) January 15, 2025
The SEC will quickly have new management. Its present chair, Gary Gensler, will step down when President-elect Donald Trump takes workplace on Monday, per the New York Occasions. It is unclear whether or not the fee’s new management will pursue authorized motion towards Musk.
Musk could have a job in Trump’s authorities. In November, Trump appointed Musk and Vivek Ramaswamy because the co-leads of a brand new Division of Authorities Effectivity aimed toward downsizing the U.S. authorities.
Musk is value $427 billion on the time of writing, in keeping with the Bloomberg Billionaires Index.