US regulatory agency files lawsuit against Elon Musk
Elon Musk is currently dealing with a lawsuit related to allegations that he did not quickly reveal his initial purchase of a substantial share in Twitter. Read Full Article at RT.com
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Elon Musk is currently facing a lawsuit from the US Securities and Exchange Commission (SEC), which alleges that he did not timely disclose his significant acquisition of Twitter shares in early 2022. This lack of disclosure is claimed to have resulted in considerable financial losses for investors who offloaded their shares at lower prices.
The complaint was submitted in federal court in Washington DC on Tuesday. It contends that Musk's ownership of Twitter exceeded the 5% threshold on March 24, 2022, which imposed a legal obligation on him to disclose his stake within ten days. Musk, however, did not file this disclosure until April 4, 2022, allowing him to continue purchasing additional shares from investors unaware of his increasing ownership.
The SEC asserts that this delay enabled Musk to acquire Twitter shares at artificially reduced prices, effectively underpaying by over $150 million. The regulator is pursuing the return of these alleged profits, in addition to civil penalties.
Musk's attorney, Alex Spiro, has criticized the lawsuit as unfounded, characterizing it as part of a “multiyear campaign of harassment” against Musk. He remarked, “This action, focusing on an alleged administrative failure to file a single form, is a sham and an admission by the SEC that they cannot bring an actual case.”
Musk's previous encounters with the SEC include a 2018 settlement related to a tweet about taking Tesla private, which led to fines and oversight of his public communications.
This latest legal development arrives amid a transition in the SEC's leadership. Outgoing SEC Chair Gary Gensler, who initiated the lawsuit, will soon be succeeded by Paul Atkins, appointed by President-elect Donald Trump. It remains unclear whether Musk's connections to the incoming administration, which include his appointment to lead the Department of Government Efficiency, will have any effect on the case.
Ultimately, Musk purchased Twitter in a deal valued at $44 billion, which was finalized on October 27, 2022, after a series of legal disputes and public controversies, including an initial bid by Musk to back out of the agreement. After the acquisition, Musk took the company private, made significant operational changes, and rebranded it as X.
Lucas Dupont for TROIB News
The complaint was submitted in federal court in Washington DC on Tuesday. It contends that Musk's ownership of Twitter exceeded the 5% threshold on March 24, 2022, which imposed a legal obligation on him to disclose his stake within ten days. Musk, however, did not file this disclosure until April 4, 2022, allowing him to continue purchasing additional shares from investors unaware of his increasing ownership.
The SEC asserts that this delay enabled Musk to acquire Twitter shares at artificially reduced prices, effectively underpaying by over $150 million. The regulator is pursuing the return of these alleged profits, in addition to civil penalties.
Musk's attorney, Alex Spiro, has criticized the lawsuit as unfounded, characterizing it as part of a “multiyear campaign of harassment” against Musk. He remarked, “This action, focusing on an alleged administrative failure to file a single form, is a sham and an admission by the SEC that they cannot bring an actual case.”
Musk's previous encounters with the SEC include a 2018 settlement related to a tweet about taking Tesla private, which led to fines and oversight of his public communications.
This latest legal development arrives amid a transition in the SEC's leadership. Outgoing SEC Chair Gary Gensler, who initiated the lawsuit, will soon be succeeded by Paul Atkins, appointed by President-elect Donald Trump. It remains unclear whether Musk's connections to the incoming administration, which include his appointment to lead the Department of Government Efficiency, will have any effect on the case.
Ultimately, Musk purchased Twitter in a deal valued at $44 billion, which was finalized on October 27, 2022, after a series of legal disputes and public controversies, including an initial bid by Musk to back out of the agreement. After the acquisition, Musk took the company private, made significant operational changes, and rebranded it as X.
Lucas Dupont for TROIB News
