YEREVAN (CoinChapter.com) —The U.S. Securities and Exchange Commission (SEC) has sued Elon Musk, claiming he violated U.S. securities laws by failing to disclose his X stock purchases on time. According to the SEC filing on Jan. 14, Musk did not report owning over 5% of X’s stock within the required 10-day period in early 2022.
SEC Details Alleged Financial Gains
The SEC filing outlines Musk’s stock purchases starting in early 2022, stating that he exceeded the 5% ownership threshold by March 14, 2022. However, Musk continued buying shares without disclosing his holdings. Between March 24 and April 4, 2022, he allegedly acquired X shares at reduced prices, avoiding at least $150 million in costs.
“Musk’s failure to timely disclose his beneficial ownership deprived other investors of the opportunity to act on material information,” the SEC stated. The agency accuses Musk of underpaying for X shares by exploiting his delayed disclosure. Moreover, the SEC seeks a jury trial and is demanding disgorgement of Musk’s financial gains along with civil penalties. Musk and Lawyer Respond to Allegations Musk publicly addressed the lawsuit in a Jan. 15 post on X, calling the SEC a “totally broken organization”.
Musk’s lawyer, Alex Spiro, also issued a statement regarding the lawsuit. He described the SEC’s filing as a “ticky-tack complaint” and said it represented years of targeting Musk.
“Mr. Musk has done nothing wrong, and everyone sees this for what it is,” Spiro said. Background on X (Twitter) Acquisition Notably, Musk officially purchased Twitter for $44 billion on April 25, 2022. Following the acquisition, he renamed the company X, fired its top executives, and laid off a significant portion of its workforce. These changes have led to regulatory scrutiny in regions like Europe and Australia. The SEC lawsuit adds to the growing list of legal challenges Musk has faced.