The Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that he committed securities fraud in 2022 by failing to disclose his acquisition of an active stake in Twitter on time. The delay, the SEC claims, allowed Musk to purchase shares at “artificially low prices,” saving him over $150 million.
The civil complaint, filed Tuesday in U.S. District Court in Washington, D.C., states Musk exceeded the 5% ownership threshold in Twitter stock in March 2022, triggering a legal requirement to disclose his holdings within 10 days. Musk, however, did not file the necessary report until more than 10 days after the deadline, during which time he purchased an additional $500 million worth of shares. The SEC alleges this secrecy deprived investors of material information that could have driven up the stock price.
Musk has denied the allegations. Last month, he revealed on X that the SEC had issued a “settlement demand,” giving him 48 hours to agree to a deal or face multiple charges.
In response to the lawsuit, Musk’s lawyer, Alex Spiro, called the SEC’s case baseless, describing it as a “sham” and the culmination of a “multi-year campaign of harassment.” Spiro added, “Musk has done nothing wrong,” and accused the agency of pursuing a “ticky-tack complaint” to justify its actions.
Musk, known for his outspoken nature, took to X following the filing to criticize the SEC, calling it a “totally broken organization” focused on trivial matters while ignoring more serious crimes.
Trump has already announced plans to overhaul the SEC, vowing to fire Chair Gary Gensler, who was appointed under Biden in 2021. Gensler has since announced his resignation, and Trump has named former SEC commissioner Paul Atkins as his intended replacement.
The SEC’s lawsuit seeks a jury trial and demands that Musk pay disgorgement of his alleged “unjust enrichment” and a civil penalty.
