SEC accuses Elon Musk of fraud over undisclosed Twitter stake

The SEC filed a lawsuit against Elon Musk, alleging he committed securities fraud in 2022 by failing to disclose his Twitter stock ownership.

Musk, who later bought Twitter (now called X) for $44 billion, reportedly withheld information about his over 5% stake, allowing him to purchase shares at “artificially low prices,” saving at least $150 million, according to the SEC.

Delayed Disclosure Raises Concerns

The SEC’s complaint, filed in Washington, D.C., states Musk crossed the 5% ownership threshold in March 2022 but didn’t disclose it until April 4. By then, Musk had already acquired over 9% of Twitter’s stock. Following his disclosure, Twitter’s stock price surged by 27%, highlighting the impact of his delayed filing.

Musk Denies Allegations

Musk’s lawyer, Alex Spiro, called the SEC’s lawsuit a “sham” and claimed it was part of a “multi-year campaign of harassment.” Musk also accused the SEC of pressuring him with a settlement demand last month.

Broader Legal and Political Context

The lawsuit comes as Musk prepares for a new role in government under President-elect Donald Trump, where he’s expected to lead a regulatory advisory group. Musk, a key financial backer of Trump’s campaign, has been critical of the SEC, particularly its outgoing chairman, Gary Gensler, who announced his resignation after Trump’s election win.

Other Legal Challenges

In addition to the SEC lawsuit, Musk faces a civil case from the Oklahoma Firefighters Pension and Retirement System. The group alleges Musk concealed his investments in Twitter, disadvantaging other shareholders. The SEC claims Musk’s failure to disclose his holdings in a timely manner allowed him to purchase shares from the public at unfairly low prices.

As Musk battles these allegations, his growing influence in business and politics ensures the spotlight remains firmly on him.