Washington, USA — The Securities and Exchange Commission filed a civil lawsuit Tuesday against Elon Musk for securities fraud in the 2022 purchase of social media platform Twitter, later renamed X.
The lawsuit claims Musk failed to report the accumulation of an active stake in Twitter as he was required to do, which would have allowed him to acquire shares at “artificially low prices.”
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This action by the commission comes six days before the still president, Joe Biden, leaves power.
Musk bought Twitter for $44 billion in 2022, but earlier that year he reportedly amassed 9 percent of the stock, without disclosing it publicly in time.
The commission’s rules require a stake of more than 5 percent in a company to be disclosed within 10 days, something Musk did not do.
That allowed him to continue buying about $500 million worth of stock, saving him about $150 million, according to the commission.
The regulators, who filed the lawsuit in federal court in the District of Columbia, are asking that Musk be ordered to disgorge the unfair profits he earned and pay a fine.
A lawyer for Musk, Alex Spiro, said in a statement that his client “has done nothing wrong” and called the lawsuit “fraudulent.”
Since buying Twitter, Musk has become involved in domestic and international politics and has become a major donor to Donald Trump’s presidential campaign.
The president-elect has promised Musk an influential role, leading an advisory body dedicated to cutting government spending and regulations.
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