The US Securities and Exchange Commission (SEC) has sued Elon Musk for violating laws during his 2022 purchase of Twitter.
The lawsuit alleges that Musk defrauded Twitter shareholders out of $150 million by taking too long to disclose his growing stake in the company as it prepares to go independent.
In early 2022, he acquired more than 5% of Twitter, but was discreet about it. The disclosure of this information could cause stock prices to rise.
Because Musk did not disclose his beneficial ownership in a timely manner, he was able to make these purchases at artificially low prices, which the public did not question. Investors who sold Twitter’s common stock during this period did so at artificially low prices and thus suffered significant economic loss.
Stated in the lawsuit
By March 2022, Musk already owned more than 9% of Twitter shares and was required by law to report this within 10 days. However, he filed the report 11 days late, which caused the company’s stock price to rise 27% compared to the change day. During these 10 days, Musk acquired Twitter for $500 million.
The SEC is demanding Muskie pay a fine and repay the profits he unfairly made from his purchases.
Musk’s lawyer said the lawsuit is an “admission” of the SEC’s failure to bring a “real case.” He called the election commission “essentially unlawful and punitive,” noting that in no case does the agency typically seek a “reasonable” fine of no more than $100,000. [Bloomberg]
Source: Iphones RU
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