“Today’s action is an admission by the SEC that they cannot bring an actual case, because Mr. Musk has done nothing wrong and everyone sees this sham for what it is,” an attorney for Musk said.
The Securities and Exchange Commission has filed a lawsuit against Elon Musk, claiming that the multibillionaire violated federal law by failing to disclose the acquisition of Twitter stock.
According to The New York Times, the SEC claims that Musk ran afoul of securities laws in 2022. He had, at the time, begun amassing a large stock position in Twitter. However, Musk failed to promptly file the proper notification with regulators. Instead, he waited nearly two weeks before informing the SEC that he had acquired a significant share in Twitter.
Attorneys for the SEC say that the delay let Musk continue buying Twitter stock at an artificially low price, letting him “underpay by at least $15 million.”
“Musk paid significantly less for the shares of Twitter common stock he purchased between March 25, 2022 and April 1, 2022 than if he had timely disclosed,” the lawsuit says, adding that Musk spent more than $500 million acquiring Twitter shares in an 11-day period.
“Investors who sold Twitter common stock during this period did so art artificially low prices and thus suffered substantial economic harm,” the lawsuit alleges.
The SEC says that, shortly after Musk announced his position, Twitter’s stock price surged by more than 27%.
Alex Spiro, a lawyer for Musk, has since posited the lawsuit as an “admission” of wrongdoing by the Securities and Exchange Commission.
“Today’s action is an admission by the SEC that they cannot bring an actual case, because Mr. Musk has done nothing wrong and everyone sees this sham for what it is,” Spiro said.
Spiro further claimed that the SEC has waged a “multiyear campaign of harassment” against Musk, but, in that time, only managed to muster “a single-count ticky-tack complaint.”
POLITICO notes that Musk has had an adversarial relationship with the SEC for years.
During the first Trump administration, the agency sued Musk for making “misleading” tweets about plans to make Tesla private. Musk ended up settling the claim, but went on “60 Minutes” to say that he does “not respect the SEC.”
It is unclear whether the Securities and Exchange Commission will continue litigating the complaint after Donald Trump takes office on January 20.
Marc Fagel, a former SEC attorney, told POLITICO that it would be unprecedented for the SEC to dismiss a claim.
“We’re in uncharted territory if the SEC becomes that politically driven,” Fagel told POLITICO. “SEC enforcement should not be a creature of politics. Political influence or consideration should not be a factor.”
Sources
SEC hits Elon Musk with lawsuit in final salvo
SEC sues Elon Musk for allegedly failing to properly disclose his Twitter ownership stake
S.E.C. Sues Elon Musk Over Twitter-Related Securities Violations
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