US SEC Files Lawsuit against Elon Musk Ahead of Trump Inauguration
Moneylife Digital Team 15 January 2025
A few days ahead of Donald Trump's inauguration as the 47th US president, the Securities and Exchange Commission (SEC) has filed a lawsuit against billionaire Elon Musk over an alleged securities violation relating to his acquisition of Twitter (now called X) in 2022. According to the SEC, Mr Musk failed to disclose his 5% stake in Twitter within the required timeframe, enabling him to purchase shares at lower prices and save US$150mn (million).
 
According to SEC's complaint, after Mr Musk failed to file a beneficial ownership report by 24 March 2022 in a timely manner, he purchased more than US$500mn worth of Twitter common stock between 25 March 2022 and 1 April 2022. 
 
"As alleged, because Mr Musk failed to timely file a beneficial ownership report with the SEC, he was able to make these purchases of Twitter common stock at artificially low prices from the unsuspecting public, who had not yet priced in the undisclosed material information of Mr Musk's beneficial ownership of more than 5% of Twitter common stock and investment purpose," the US regulator says.
 
According to the SEC's complaint, Mr Musk underpaid by at least US$150mn for his purchases of Twitter common stock in this period. The complaint further alleges that, due to Mr Musk's failure to timely file a beneficial ownership report with the SEC, investors that sold Twitter common stock between 25 March 2022 and 1 April 2022 did so at artificially low prices, thereby suffering substantial economic harm.
 
SEC's complaint, filed in the US district court for the district of Columbia, charges Mr Musk with violating Section 13(d) of the Exchange Act and rule 13d-1 thereunder. Section 13(d) imposes a strict liability standard. The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest and civil penalties.
Comments
parimalshah1
3 weeks ago
The dark side of Biden the bully is clearly in public view. The worst POTUS of the century.
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