Biden’s SEC Sues Elon Musk Again Over Twitter Purchase

Elon Musk is facing a lawsuit from the U.S. Securities and Exchange Commission (SEC) for not disclosing his large ownership of Twitter stock in time.

Key Facts:

– The SEC says Musk failed to reveal his purchase of 5% of Twitter’s stock until 11 days after the deadline.
– By delaying disclosure, the SEC claims Musk gained shares at an unfairly low price, underpaying by $150 million.
– Investors must disclose any stake above 5% within 10 days by law.
– Musk’s lawyer calls the suit a “ticky tak” complaint.
– This marks the SEC’s third lawsuit involving Musk, following cases over a 2018 tweet and a push to force Musk to testify about Twitter purchases.

The Rest of The Story:

According to the suit, Musk quietly bought Twitter shares in March 2022.

By law, anyone who crosses the 5% ownership threshold must file the proper form within 10 days, but the SEC claims that Musk waited too long, driving up the share price once his stake became public.

When his big position finally became known, Twitter’s stock rose significantly, and this benefited Musk after he had already obtained more shares at lower prices.

The SEC believes Musk should have followed standard disclosure rules to keep the playing field even for other investors.

By missing the deadline, Musk allegedly managed to purchase additional shares before markets absorbed the news.

As a result, the agency is demanding financial penalties and wants Musk to be held responsible.

Musk’s lawyer, Alex Spiro, insists this lawsuit is weak.

He states that the SEC is simply harassing Musk for a minor paperwork offense.

Spiro claims there is no substantial wrongdoing, and any penalty would be minimal even if the SEC prevails.

Musk’s clashes with regulators date back to 2018, when he tweeted that he was considering taking Tesla private at $420 per share.

The SEC said that tweet misled investors.

He settled that dispute by stepping down as Tesla’s chairman.

The Tesla chief also faced more scrutiny in 2023 when the SEC tried to force him to testify about his later purchase of Twitter.

The Bottom Line:

The SEC’s lawsuit against Musk centers on how he handled disclosure of his Twitter holdings.

While the agency views it as a critical violation of stock market rules, Musk’s legal team considers it overreach.

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The outcome could serve as a reminder that the SEC monitors even wealthy business leaders for compliance with established rules.