SEC Targets Elon Musk Over Twitter Deal as Biden’s Exit Nears [WATCH]

The Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing the billionaire of misleading shareholders by delaying the disclosure of his Twitter stock purchases.

The suit, filed on Tuesday in federal court in Washington, D.C., marks an escalation in the agency’s long-standing feud with Musk.

According to the SEC, Musk’s delayed disclosure allowed him to save over $150 million when purchasing Twitter stock.

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The late filing allegedly caused some investors to sell shares at artificially low prices, unaware of Musk’s intentions to acquire a significant stake in the company.

The SEC’s case centers on a rule known as 13D, which requires investors to disclose ownership of 5% or more in a public company within 10 days.

The agency claims Musk disclosed his Twitter stake 11 days after the deadline.

The lawsuit seeks to recover the money Musk allegedly saved, impose a financial penalty, and enforce compliance with disclosure regulations.

The SEC contends that the rule serves as an early-warning mechanism for investors and must be strictly enforced.

SEC Takes Legal Action Against Elon Musk Over Twitter Acquisition Days Before Biden Leaves…

The Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing the billionaire of misleading shareholders by delaying the disclosure of his Twitter stock… pic.twitter.com/DsFDDTHBTx

— RVM News (@redvoicenews) January 15, 2025

Musk responded to the lawsuit on X, the platform formerly known as Twitter, which he now owns. “The SEC is a totally broken organization. They spend their time on s— like this when there are so many actual crimes that go unpunished,” he wrote.

Musk’s attorney, Alex Spiro, criticized the SEC’s actions, calling the lawsuit a “ticky-tack complaint” and accusing the agency of pursuing a politically motivated campaign against Musk.

The SEC’s investigation into Musk’s Twitter stock purchases began in 2022 when Musk acquired a significant stake in the platform, ultimately leading to his takeover and its rebranding as X.

The lawsuit alleges that Musk delayed his cooperation with the investigation, prompting the SEC to seek court orders for his testimony.

Musk, who has previously settled unrelated SEC charges in 2018 over misleading claims about taking Tesla private, has frequently criticized the agency.

In October 2023, Musk called for a “comprehensive overhaul” of federal regulatory bodies, accusing them of abusing their authority.

The lawsuit comes as the SEC undergoes significant leadership changes. Current SEC Chairman Gary Gensler is stepping down, with Republican lawyer Paul Atkins, known for his skepticism of SEC enforcement, nominated by President-elect Donald Trump to succeed him.

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Trump, who has received substantial financial backing from Musk, has raised questions about potential conflicts of interest.

Musk is also co-leading an initiative called the Department of Government Efficiency, aimed at reducing federal spending and regulatory oversight.

The SEC’s five-member commission, currently split along party lines, will soon shift to a Republican majority following the departure of Democratic Commissioner Jaime Lizàrraga and Gensler.

This change could influence how the lawsuit against Musk proceeds under the incoming administration.

The SEC’s enforcement of the 13D rule is not unprecedented.

For example, in March, HG Vora Capital Management was fined $950,000 for a similar violation involving its stake in Ryder, a trucking firm.

Marc Fagel, a former SEC regional director, emphasized the importance of enforcing disclosure rules to maintain market integrity.

“If you can get away with it when it’s front-page news, why bother to comply at all?” he noted.

As the lawsuit unfolds, it will test the SEC’s independence and highlight the challenges of regulating high-profile figures like Musk under a politically charged environment.

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