The U.S. Securities and Exchange Commission has sued billionaire Elon Musk for failing to timely disclose his ownership of Twitter shares in early 2022 before purchasing the social media site.
As a result, Musk was in a position to pay “at least $150 million” for shares he purchased after having to reveal his ownership of greater than 5% of Twitter’s shares, the SEC alleges. Musk bought Twitter in October 2022 and later renamed it X.
What is the SEC criticism?
Musk began accumulating Twitter shares in early 2022, and by March of this 12 months he owned greater than 5%. At that time, the criticism says, he was legally required to reveal his ownership but didn’t accomplish that until April 4, 11 days after the report was due.
Musk’s attorney, Alex Spiro, said in an announcement that the lawsuit “represents an admission by the SEC that it cannot make a factual case” because Musk “did nothing wrong.” He called the lawsuit a “sham.”
“As the SEC withdraws and leaves office, the SEC’s multi-year harassment campaign against Mr. Musk culminated in the filing of a single-point ticky-tock complaint against Mr. Musk under Section 13(d) for alleged administrative failure to file a single form – an offense which, even if proven, carries a nominal penalty,” Spiro added.
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The Twitter deal
After Musk signed a deal to amass Twitter in April 2022, he attempted to get out of it, leading to the corporate suing him to force him to undergo with the acquisition.
The SEC said it has authorized an investigation starting in April 2022 to find out whether securities laws were violated in reference to Musk’s purchases of Twitter shares and his statements and SEC filings related to the corporate.
Before filing the lawsuit, the SEC went to court to force Musk to testify as a part of an investigation into his purchase of Twitter.
Current SEC Chairman Gary Gensler plans to resign on January 20, and it shouldn’t be clear whether the brand new administration will pursue the lawsuit.
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The post Why is the SEC suing Elon Musk? appeared first on MoneyDown.
