Dispute reignites! SEC sues Musk for failing to disclose his Twitter stock holdings, allegedly making an improper profit of $150 million.

The US Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk on Tuesday, alleging that the world's richest person failed to timely disclose a significant stake in the social media company Twitter in 2022. The SEC stated that Musk violated federal securities laws by delaying the disclosure of his initial purchase of 5% of Twitter's common stock by 11 days. An SEC regulation requires investors to disclose information within 10 calendar days when their ownership exceeds 5% (for Musk, this was by March 24, 2022). The SEC stated that Musk "sacrificed the interests of investors" by artificially purchasing over $500 million worth of Twitter stock at a low price, and only disclosed his purchase on April 4, 2022, when he owned 9.2% of the shares. During this period, he "underpaid" Twitter shareholders by over $150 million. The SEC stated that Twitter's stock price rose by over 27% after this disclosure. The lawsuit on Tuesday aims to compel Musk to pay civil penalties and forfeit his undue profits. Musk ultimately acquired Twitter for $44 billion in October 2022, renaming it X. Musk's lawyer, Alex Spiro, responded that the SEC's lawsuit is the culmination of years of harassment by the regulatory agency against his client. He stated, "This action shows that the SEC cannot bring an actual case. Musk did nothing wrong, and everyone sees this for what it is a charade." Spiro added that the lawsuit only involves an "administrative failure to submit a form - even if proven, would only result in a nominal penalty." It is understood that Musk was an adviser to the US President-elect Donald Trump and amassed wealth of $417 billion through his businesses such as the electric car maker Tesla, Inc. (TSLA.US) and the rocket company SpaceX. The SEC filed the lawsuit against Musk six days before Trump's inauguration on January 20. SEC Chairman Gary Gensler will step down on the same day, and the successor nominated by Trump, Paul Atkins, is expected to review many of Gensler's rules and enforcement actions. Musk has had a long-standing dispute with the SEC. As early as 2018, Musk posted on Twitter about potentially taking Tesla, Inc. private, leading to fraud charges from the SEC. Musk paid a $20 million civil penalty and relinquished his position as Tesla, Inc. chairman to settle the lawsuit.