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Elon Musk is facing legal action for not promptly revealing his acquisition of over 5% of Twitter shares. The wealthiest individual globally purchased the shares in March 2022, and the United States Securities and Exchange Commission (SEC) alleges that this delay enabled him to acquire additional Twitter stock at prices that were artificially low. In documents submitted to a federal court in Washington, D.C., the SEC contends that this situation resulted in Mr. Musk underpaying by a minimum of $150 million (£123 million). The commission is seeking a civil penalty against Mr. Musk and demands that he relinquish any profits he improperly gained.
In response to the lawsuit a lawyer for the multi-billionaire said: "Mr Musk has done nothing wrong and everyone sees this sham for what it is."
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An SEC regulation mandates that investors must report their ownership exceeding 5% within a period of 10 calendar days. According to the SEC, Mr. Musk failed to make his disclosure until April 4, 2022, which was 11 days past the stipulated deadline, at which time he had acquired over 9% of Twitter's shares. Following Mr. Musk's announcement, Twitter's stock price experienced an increase of more than 27%, as noted by the SEC.
In October 2022, Mr. Musk subsequently acquired Twitter for $44 billion (£36 billion) and rebranded the platform as X. Since the election of Donald Trump, Mr. Musk has been appointed to lead a newly established Department of Government Efficiency (DOGE), alongside former Republican presidential candidate Vivek Ramaswamy. The president-elect indicated that this department would focus on minimizing government red tape, eliminating unnecessary regulations, reducing wasteful spending, and reorganizing federal agencies.
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