The SEC alleges that Elon Musk's failure to disclose his Twitter stake allowed him to acquire shares at artificially low prices, amounting to $150m in savings.
According to SEC rules, investors must report holdings exceeding 5% within 10 days; Musk disclosed his purchase 21 days later, violating this regulation.
The lawsuit states that Musk's actions led to significant financial harm for investors, as Twitter's share price surged over 27% following the public disclosure.
The SEC is seeking not only a fine but also the forfeiture of 'unjust' profits Musk gained due to his delayed reporting.
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