Michaela Alvez
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing the X owner and CEO of not revealing his acquisition of more than 5% of Twitter’s stock in early 2022.
In a January 14 filing, the lawsuit accuses Elon Musk of violating disclosure rules during his 2022 acquisition of Twitter shares, claiming he failed to disclose “he had acquired beneficial ownership” and underpaid by $150 million, thus breaching securities laws.
Musk allegedly failed to file a required report to report his Twitter holdings within the 10-day deadline after surpassing a 5% stake in the company. He submitted the disclosure 11 days late on April 4, 2022.
“That day, Twitter’s stock price increased more than 27% over its previous day’s closing price,” the SEC stated in the filing.
The SEC’s lawsuit comes at a notable time, just six days before Chair Gary Gensler is scheduled to step down on January 20, coinciding with President-elect Donald Trump’s inauguration.
After acquiring Twitter for $44 billion, Musk rebranded the platform as X, dismissed top executives and half of its staff, and overhauled its misinformation policies. These changes led to regulatory scrutiny across multiple regions, including Europe and Australia.
The commission has been probing whether Musk or his associates were involved in securities fraud related to the acquisition, including an examination of Tesla stock sales used to fund the purchase.
In December 2024, Gensler issued Musk a 48-hour deadline to agree to a settlement or face a series of charges.
In reaction to the lawsuit, Musk voiced his frustrations on X, labeling the SEC as a “totally broken organization.”
“They spend their time on shit like this when there are so many actual crimes that go unpunished,” Musk wrote.
The SEC is reportedly pursuing a jury trial and demanding that Musk pay a civil penalty in addition to “disgorgement of his unjust enrichment,” according to the lawsuit.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
