US SEC sues Elon Musk over late disclosure of Twitter stake

Elon Musk was sued on Tuesday by the U.S. Securities and Exchange Commission for having failed to timely disclose purchasing more than 5% of Twitter's common stock in March 2022.

In a complaint filed in Washington, D.C., federal court, the SEC said the delay allowed Musk to continue buying Twitter shares at artificially low prices, allowing him to underpay by at least $150 million.

The SEC wants Musk to pay a civil fine and disgorge profits he was not entitled to.


Alex Spiro, a lawyer for Musk, in an email said: "Mr. Musk has done nothing wrong and everyone sees this sham for what it is."

An SEC rule requires investors like Musk to disclose within 10 calendar days when they cross a 5% ownership threshold.

The SEC said Musk did not disclose his stake until April 4, 2022, 11 days after the deadline, by which time he owned more than 9% of Twitter's shares.

Twitter's share price rose more than 27% following that disclosure, the SEC said.

Musk eventually purchased Twitter for $44 billion in October 2022, and renamed it X.