SEC sues Elon Musk over late disclosure of Twitter stake

On January 14, the SEC filed suit against Elon Musk, accusing him of failing to disclose on time his beneficial ownership in Twitter (X). 

The regulator says the billionaire began buying the social network’s stock in early 2022 and, by March 14 that year, held more than 5% of the outstanding shares. He was required to notify the Commission within ten days (by March 24, 2022) but submitted the report 11 days late, on April 4, 2022.

According to the SEC’s findings, as a result Musk continued “to purchase shares at artificially depressed prices”, spending more than $500m and “underpaying at least $150m”. 

“On the day the report was filed, the price of Twitter’s securities rose by more than 27% compared with the previous day’s closing price,” the regulator noted.

The Commission sought disgorgement of “ill-gotten gains” along with a civil penalty.

Musk responded to the suit, calling the SEC “a totally broken organization”.

Totally broken organization.

They spend their time on shit like this when there are so many actual crimes that go unpunished.

— Elon Musk (@elonmusk) January 15, 2025

“They spend their time on shit like this, while many real crimes go unpunished,” he wrote on X.

The billionaire’s lawyer, Alex Spiro, argued that the agency’s actions are “an admission that they cannot bring a real case”.

In April 2022, Musk became Twitter’s largest shareholder after purchasing 9.2% of the stock for $2.89bn. He later offered to buy the platform for $43bn to create “an inclusive arena for free speech”.

The $44bn deal closed in October. The company’s previous CEO Parag Agrawal and its chief financial officer Ned Segal left the headquarters.

In October 2023, the SEC sued Musk for refusing to testify about the acquisition of X. In response he called for a “comprehensive review” of the agency’s activities and the creation of a commission to take action against those who “abuse their power for personal and political purposes”.