The SEC is suing Elon Musk for allegedly delaying the disclosure of his Twitter stake, allowing him to buy more shares at a lower price. Musk is accused of missing an SEC deadline by 11 days, during which he purchased an additional 4% of Twitter. This, the SEC argues, resulted in Musk underpaying for his 9% stake and harming other investors. The lawsuit seeks repayment of the alleged underpayment and civil penalties.
The Sec urities and Exchange Commission filed a lawsuit against Elon Musk for an alleged violation in his acquisition of Twitter.The delay is disclosing his stake, allegedly allowed Musk to acquire even more shares in the company.
In this particular lawsuit, Musk is alleged to have failed in disclosing that he had a 5 percent stake in Twitter, missing an SEC-mandated deadline by 11 days. During that 11-day period, Musk was able to snap up a further 4 percent in Twitter, bettering his position while other stake holders and board members were seemingly unaware of what has happening.
“During the period that Musk was required to publicly disclose his beneficial ownership but had failed to do so, he spent more than $500 million purchasing additional shares of Twitter common stock.
For those wondering, this action, if deemed to infringe upon federal securities law, will not invalidate the Twitter acquisition. The SEC is, however, proposing that Musk pay back the aforementioned $150 million he wrangled by failing to disclose his stake in the company at the time, as well as any civil penalties that may be attached.
ELON MUSK TWITTER SEC LAWSUIT STOCK MARKET
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