SEC Sues Musk on Eve of Trump Inauguration
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Synopsis
On January 15, just ahead of Donald Trump's inauguration, the SEC filed a lawsuit against Elon Musk for alleged securities violations connected to his Twitter acquisition. The claims include delayed disclosures which purportedly allowed Musk to increase his stake in the company.
Key Takeaways
- SEC lawsuit against Elon Musk for alleged securities violations
- Claims of delayed disclosure of Twitter ownership
- Musk increased his stake from 5% to 9% during the delay
- Gary Gensler set to leave SEC on Trump's inauguration
- Trump nominated Paul Atkins as the new SEC chief
Washington, Jan 15 (NationPress) Just days before Donald Trump assumes office as the 47th US President, the Securities and Exchange Commission (SEC) has initiated a lawsuit against his close associate Elon Musk over an alleged securities infringement related to his purchase of Twitter (now referred to as X) in 2022.
The SEC's lawsuit claims that the tech mogul “failed to reveal his 5 percent ownership in Twitter promptly,” which is a breach of federal securities regulations.
Filed in federal court in Washington, DC, the complaint further alleged that the owner of Tesla and SpaceX “delayed disclosing the acquisition to accumulate a larger share at a lower price,” as per reports.
The legal action against Musk coincides with Gary Gensler, the SEC Chairman, preparing to step down on January 20, coinciding with Trump’s inauguration as President.
The SEC's complaint states that after acquiring over 5 percent of Twitter—an act Musk allegedly completed on March 24, 2022—he was mandated to submit a beneficial ownership report.
This report was filed on April 4, 2022, according to the SEC’s allegations.
During this period of delayed disclosure, Musk purportedly expanded his Twitter stake from 5 percent to 9 percent, according to various reports.
Musk’s legal representatives indicated in media reports that the SEC lacks grounds for an “actual case” against the billionaire. “As the SEC departs and vacates office, their prolonged campaign of harassment against Mr. Musk culminated in a single-count technical complaint,” the lawyers stated.
The President-elect has put forth Paul Atkins as the new SEC leader, who has previously served as an SEC Commissioner and is anticipated to be an ally of Trump.
Musk finalized the acquisition of Twitter for an astounding $44 billion in October 2022.
