Elon Musk sued by SEC over disclosure of Twitter (TWTR) stock purchases
The Securities and Exchange Commission says Elon Musk underpaid for Twitter by at least $150 million by reporting his Twitter stake 11 days late.
Elon Musk has been sued be the SEC. The owner of now-X began purchasing Twitter shares in 2022 and needed to notify the Securities and Exchange Commission when his shares reached five percent. Musk failed to do this in a timely manner, instead reporting 11 days late when his stake was over nine percent.
On January 14, 2025, APNews reported that the Securities and Exchange Commission sued Elon Musk stating he failed to disclose his Twitter (TWTR) stock before purchasing the social media platform. The SEC claims that Musk underpaid “by at least $150 million” by failing to disclose he owned more than five percent of the company’s shares.
Elon Musk was required to disclose his ownership of the shares after reaching the five percent mark. The report states he notified the SEC on April 4, 11 days late. Reuters reports that Musk disclosed his position when he had amassed a 9.2 percent stake in Twitter.
As Tom Krisher writes, when Musk did disclose his stake in Twitter, the value of the shares increased by 27 percent. According to the lawsuit, this delay materially impacted investors who had sold shares before Musk disclosed his stake in the company, resulting in said investors missing out on the increase in value (almost $50 per share by the end of trading on April 4).
Elon Musk continues to enter the news cycle for better or worse. He’s recently stated he will create an AI video game studio, his $1 million giveaway might violate federal law, and United Auto Workers have filed labor lawsuits against him. Despite this, Telsa (TSL) stock hit above $420 a share in December 2024.
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