The SEC alleges that by failing to disclose his ownership of more than 5% of Twitter shares in a timely manner, Elon Musk was able to underpay by at least $150 million. This complaint stems from his acquisition of shares starting in early 2022, and it highlights a significant regulatory concern regarding his compliance with securities laws, particularly since he did not make the required disclosure until 11 days past the deadline.
Musk's lawyer, Alex Spiro, characterized the SEC's lawsuit as baseless, arguing that it represents an acknowledgment of the agency's inability to present a strong case against Musk. He referred to the filing as a 'sham,’ asserting that Musk has committed no wrongdoing and framing the suit as a mere administrative issue involving a single form failure, which he describes as a technicality that carries a minimal penalty.
Following Musk's attempt to withdraw from the Twitter acquisition deal after signing, the company initiated legal action against him to enforce the agreement. This lawsuit is part of a broader narrative regarding Musk's tumultuous relationship with regulatory bodies, particularly as the SEC has previously sought to investigate his securities transactions and public statements related to his Twitter investments.
The SEC began its investigation into Musk's Twitter stock purchases in April 2022, suspecting potential violations of securities laws. This came at a time when Musk's statements and filings regarding Twitter were under scrutiny, highlighting how regulatory institutions have been closely monitoring high-profile individuals like Musk, especially given the complexity of their financial dealings and public communications.
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