The United States Securities and Exchange Commission (SEC) announced on Tuesday its intention to initiate legal action against technology magnate Elon Musk, asserting that he did not promptly disclose his acquisition of over 5 percent of Twitter shares prior to his takeover of the company in 2022.
The SEC claims that Musk commenced purchasing Twitter shares in early 2022, surpassing the 5 percent threshold on March 14, 2022.
Legally, he was obligated to publicly disclose this information within a period of 10 calendar days; however, he only revealed that he owned 9 percent of the company on April 4, which was 11 days past the deadline, as stated by the SEC.
The SEC filing indicates that Twitter’s share price experienced a 27 percent increase following this disclosure.
The agency examined Musk’s acquisitions and determined that he “underpaid by at least 150 million dollars for his purchases of Twitter common stock during this timeframe”.
According to the lawsuit, shareholders who sold their shares to him during this interval may have incurred financial losses.
The SEC is seeking to compel Elon Musk to repay the aforementioned sum, along with an additional financial penalty.
Musk’s attorney, Alex Spiro, contended that the tech billionaire had “committed no wrongdoing.”
In a statement to the financial service Bloomberg, he also referred to a “multi-year campaign of harassment” directed at Musk by the SEC.
The trajectory of the lawsuit remains uncertain, as Elon Musk is a close associate of Donald Trump, who is set to be inaugurated as the next U.S. president on January 20.
The transition in administration will also result in a change in leadership at the SEC.
Gary Gensler, the current chairman of the SEC, has already announced his intention to resign from his position.
Elon Musk acquired Twitter in October 2022 for a sum of 44 billion dollars.
Subsequently, he renamed the online platform as X.
