The U.S. Securities and Exchange Commission is reportedly suing Elon Musk over his purchase of Twitter in 2022.
He might be the richest man in the world, but with lawsuits piling up, Elon Musk could soon be hit hard in the pocket. The tech billionaire famously purchased Twitter (now known as X) for $44 billion in October 2022, but according to the U.S. Securities and Exchange Commission (SEC), he massively underpaid for the social media platform.
Now, the SEC is suing Musk over the purchase. The filing claims that Musk didn’t disclose how he'd bought more than 5% of Twitter’s common stock in March 2022 in a 'timely way.'
He's accused of shafting shareholders by buying later shares at 'artificially low prices.'
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The suit was filed in Washington, saying that the underpayment of shares led to Musk underpaying "by at least $150m for shares he purchased after his financial beneficial ownership report was due."
It's alleged that his 5% common stock ownership wasn't revealed until 11 days after the report was due.
The SEC maintains that Musk used a delay to put over $500 million in Twitter stock by buying from undervalued sellers. On the day that Musk eventually announced that he'd acquired 9% of Twitter stock, its stock prices soared by 27% and led to complaints that Musk had made the most of his financial advantage.
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As reported by CNBC, Musk denies these claims.
In a statement, lawyer Alex Spiro says that the SEC’s lawsuit amounts to 'an admission' that it has no case. Spiro maintains Musk "has done nothing wrong and everyone sees this sham for what it is."
Back in 2021, the SEC looked into Musk and his brother, Kimbal Musk, amid supposed securities fraud and violations of insider trading rules. It came after they sold tens of thousands of shares in Tesla. With Kimbal Musk sitting on the board of directors and Elon being the CEO, the pair soon found themselves under investigation.
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As for the latest case, Spiro says it's due to a failure to 'file a single form'. Still, he refers to "the SEC’s multi-year campaign of harassment against Mr Musk culminated in the filing of a single-count ticky-tack complaint against Mr Musk."
The SEC is standing by its lawsuit, alleging that Musk has tried to manipulate the market. It's raised questions about these high-profile figures being called to task over financial regulations and market transparency.
The timing is key as Musk finds himself by the side of President-elect Donald Trump and as the co-head of the Department of Government Efficiency.
An SEC spokesperson refused to comment “beyond the litigation release and the complaint, which is, literally, an actual case brought by the SEC."
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After the suit was filed, a typically vocal Musk took to X and referred to the SEC as a 'totally broken organization'. He concluded: "They spend their time on sh*t like this when there are so many actual crimes that go unpunished."