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SEC Sues Elon Musk Over X Stock Disclosure Violations
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that he violated U.S. securities laws by failing to disclose his stock purchases in X within the required 10-day period.
According to the SEC filing on January 14, Musk did not report owning more than 5% of X’s shares until April 4, 2022 – 11 days past the deadline. This delay allegedly enabled him to acquire additional shares at reduced prices. When his ownership became public knowledge, X’s stock value surged by 27%, underscoring the significant impact on the market.
The SEC claims that Musk continued buying shares without disclosing his holdings, exceeding the 5% threshold by March 14, 2022. However, he refrained from making this information publicly available until April 4, 2022. During this period, he allegedly acquired X shares at reduced prices, resulting in financial gains of at least $150 million.
The SEC emphasizes that Musk’s failure to timely disclose his beneficial ownership deprived other investors of the opportunity to act on material information. As a result, they are seeking a jury trial and demanding disgorgement of Musk’s financial gains along with civil penalties.
In response to the lawsuit, Musk has publicly criticized the SEC, calling it a “totally broken organization”. His lawyer, Alex Spiro, also issued a statement, describing the filing as a “ticky-tack complaint” that represents years of targeting Musk. Spiro claimed that his client has done nothing wrong and that everyone sees this for what it is.
The lawsuit comes amid growing regulatory scrutiny surrounding Elon’s recent acquisition of Twitter and subsequent renamining of the company to X. The SEC’s actions also add to the list of legal challenges faced by Musk in recent times.
Source: coinchapter.com
