U.S. financial regulators have charged Elon Musk with allegedly threatening other shareholders by not disclosing his ownership of Twitter shares and then acquiring the company’s shares at artificially low prices.
The Securities and Exchange Commission (SEC) filed a lawsuit against Musk in federal court in Washington, D.C., accusing him of securities violations. The complaint states that Musk failed to disclose his 5% stake in the company in a timely manner and profited from the stock purchased after the filing deadline for ownership statements. The company ended up paying less than $1,000,000.
Musk purchased Twitter for $44 billion in 2022 and later rebranded the company as X. He acquired a 5% stake in the company before the purchase, which normally would require a public offering. The SEC claims that Musk disclosed his ownership on Twitter 11 days after the reporting deadline.
Musk’s lawyer, Alex Spiro, stated in an email that the SEC’s lawsuit is baseless, claiming that Musk did nothing wrong. This is not the first time Musk has been investigated by the SEC for his involvement with Twitter.
The SEC alleges that Musk delayed disclosing his ownership to the public and spent over $500 million on additional shares, potentially allowing the company to purchase stock at an artificially low price.
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Despite Musk disclosing his ownership to the SEC 11 days later, he stated that he had acquired more than 9% of Twitter’s stock. The SEC noted that Twitter’s stock price rose by over 27% on that day.
Source: www.theguardian.com
