Elon Musk was sued on Tuesday by the Securities and Exchange Commission for having failed to timely disclose purchasing more than 5% of Twitter’s common stock in March 2022.
In a complaint filed in Washington, DC, federal court, the SEC said the delay allowed Musk to continue buying Twitter shares at artificially low prices, allowing him to underpay by at least $150 million.
A lawyer for Musk said the billionaire Twitter owner did nothing wrong and called the SEC case a “sham.”
The SEC wants Musk to pay a civil fine and disgorge profits he was not entitled to.
Alex Spiro, a lawyer for Musk, in an email said: “Mr. Musk has done nothing wrong and everyone sees this sham for what it is.”
An SEC rule requires investors like Musk to disclose within 10 calendar days when they cross a 5% ownership threshold.
The SEC said Musk did not disclose his stake until April 4, 2022, 11 days after the deadline, by which time he owned more than 9% of Twitter’s shares.
Twitter’s share price rose more than 27% following that disclosure, the SEC said.
Musk eventually purchased Twitter for $44 billion in October 2022, and renamed it X.
The is a developing story. Please check back for updates.