YEREVAN (CoinChapter.com) — The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that he violated U.S. securities laws by failing to disclose his purchases of X stock in a timely manner. According to the SEC filing on January 14, Musk did not report owning more than 5% of X’s stock within the required 10-day period in early 2022.
The SEC filing provides details of the alleged financial gains made by Musk. It states that Musk exceeded the 5% ownership threshold by March 14, 2022. However, he continued to buy shares without disclosing his holdings. Between March 24 and April 4, 2022, he allegedly acquired X shares at reduced prices, avoiding at least $150 million in costs.
The SEC stated, “Musk’s failure to timely disclose his beneficial ownership deprived other investors of the opportunity to act on material information.” The agency accuses Musk of underpaying for X shares by taking advantage of his delayed disclosure.
Additionally, the SEC is seeking a jury trial and is demanding that Musk disgorge his financial gains and pay civil penalties.
Musk and his lawyer have responded to the allegations. Musk addressed the lawsuit publicly in a post on X on January 15, referring to the SEC as a “totally broken organization.”
Musk’s lawyer, Alex Spiro, also issued a statement regarding the lawsuit. He described the SEC’s filing as a “ticky-tack complaint” and claimed that it represented years of targeting Musk.
“Mr. Musk has done nothing wrong, and everyone sees this for what it is,” Spiro said.
Regarding the background on the acquisition of X (formerly Twitter), it is worth noting that Musk officially purchased the company for $44 billion on April 25, 2022. Following the acquisition, he renamed the company X, dismissed its top executives, and laid off a significant portion of its workforce. These changes have attracted regulatory scrutiny in regions such as Europe and Australia.
The SEC lawsuit adds to the growing number of legal challenges that Musk has faced.