Elon Musk faces SEC lawsuit over Twitter deal disclosure timing
What's the story
Elon Musk is being sued by the US Securities and Exchange Commission (SEC) in a federal lawsuit over his purchase of Twitter (now called X).
The SEC claims that Musk violated securities laws by delaying the disclosure of his major stake in Twitter. The late disclosure reportedly saved him $150 million.
Musk bought a major stake in Twitter ahead of the $44 billion acquisition deal. However, he kept the information under wraps until weeks later.
Investor impact
SEC alleges Musk's late disclosure cost investors $150 million
The SEC contends that his late disclosure breached their mandatory 10-day window for such announcements.
It argues that Musk should have filed his paperwork by March 24, 2022, but he did so on April 4 and again on April 5.
Meanwhile, he had allegedly purchased over $500 million worth of Twitter shares.
The commission alleges that this late disclosure cost investors at least $150 million and hurt those who sold their stock between March 25 and April 1.
Lawsuit demands
SEC seeks recovery of gains and additional penalties
The SEC's lawsuit seeks to reclaim the money Musk earned by delaying his disclosure. Along with this, the commission is also seeking a civil penalty and other punishments against him.
However, with the Trump administration poised to change the leadership at the SEC, it remains to be seen how far this lawsuit goes given Musk's association with the president-elect.