Elon Musk faces a lawsuit from the United States Securities and Exchange Commission (SEC) for a delay in disclosing his stake in Twitter, which allowed him to buy shares at artificially low prices. According to reports, Musk, the CEO of Tesla and SpaceX, bought over 5% of Twitter’s stock in March 2022, but did not inform regulators in the mandatory 10-day period. Musk’s delay, the SEC says, allowed him to save at least $150 million on future share purchases.
Musk disclosed his stake 11 days after the deadline, on April 4, 2022, according to the SEC. Twitter’s stock price rose 27% after his disclosure, a reaction to the news by the market. Musk’s failure to meet the deadline has caused economic harm to shareholders who sold their shares without knowing that Musk had made a significant investment, the watchdog says.

The lawsuit is a ‘sham,’ a ‘baseless attack,’ and part of a larger campaign of harassment against Musk, Musk’s lawyer, Alex Spiro, has said. It is the third lawsuit the SEC has filed against Musk, including a high profile case in 2018 over a tweet that he had secured funding to take Tesla private. That case settled with Musk paying a $20 million fine and stepping down as Tesla’s chairman.
After initially trying to back out of the acquisition deal, Musk bought Twitter in October 2022 for $44 billion. The lawsuit, which comes just days before SEC Chair Gary Gensler’s departure, also raises questions about its future under new leadership. Timely disclosure of stock purchases over 5% is important to maintain transparency and protect investors, the SEC argues. The lawsuit has reignited debates over corporate accountability and regulatory oversight, and it underscores Musk’s complicated relationship with U.S. securities regulations.