After more than two years of investigation, the Securities and Exchange Commission has filed a lawsuit against Elon Musk over his late disclosure of Twitter stock he had amassed before announcing his intention to buy the company in 2022.
The SEC said in a court filing that Musk filed documents with the SEC disclosing his purchase of Twitter stock 11 days after the SEC-mandated deadline. Regulators say this allowed him to buy up even more Twitter stock at a time when other investors were unaware of his involvement with the company.
From the complaint:
Mr. Musk was required to disclose his beneficial ownership, but failed to do so and spent more than $500 million to purchase additional shares of Twitter common stock. Mr. Musk’s failure to disclose his beneficial ownership in a timely manner allowed him to make these purchases from the unsuspecting public at artificially low prices, which included a combination of Twitter common stock and Important, undisclosed information about Musk’s beneficial ownership of more than 5 percent of the investment had not yet been reflected. the purpose. In total, Mr. Musk underpaid more than $150 million to Twitter investors by purchasing Twitter common stock during this period. Investors who sold Twitter common stock during this period suffered significant financial losses because they sold at an artificially low price.
Regulators have been investigating Musk for years and have long been at odds with Company X’s owners. At one point, the SEC accused Musk of trying to delay an investigation into his Twitter investment by using a “trick” to delay his plans. Last month, Musk shared a copy of a letter to SEC Chairman Gary Gensler in which his lawyers accused the regulator of “six years of harassment” targeting Musk. . The letter indicated that Musk had rejected a settlement offer from the SEC related to the Twitter investigation.
X did not immediately respond to a request for comment.
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