US SEC sues Elon Musk over late disclosure of Twitter stake
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The news: The US Securities and Exchange Commission (SEC) is suing Elon Musk for allegedly not disclosing his substantial Twitter stake by the reporting deadline, allowing him to build his position in the social media company at lower prices.
The numbers: The SEC says Musk acquired more than 9% in the company in March 2022, months before completing his acquisition in October 2022.
Reporting requirements are due within 10 days for holdings over 5%. Musk reported on the 11th day which triggered a 27% surge in the stock’s price.
The context: According to the SEC’s complaint filed in federal court, Musk bought shares at “artificially low prices”, which allowed him to underpay for at least $150 million worth of stock.
The SEC has asked the court to direct Musk to pay a civil penalty and return profits.
Musk also faces a shareholder lawsuit which claims he used trading strategies to avoid public detection when acquiring Twitter shares.
