Washington: Just days ahead of Donald Trump’s inauguration as the 47th US President, the Securities and Exchange Commission (SEC) has filed a lawsuit against his best ally Elon Musk over an alleged securities violation relating to his acquisition of Twitter (now called X) in 2022.
The SEC lawsuit alleged that the tech billionaire “failed to disclose his 5 per cent ownership stake of Twitter in a timely manner”, violating federal securities law.
The complaint, filed in federal court in Washington, DC, also claimed that the Tesla and SpaceX owner “waited to disclose the acquisition in order to build up a larger position in Twitter at a discounted price”, said reports.
The lawsuit against Musk came as Gary Gensler, Chairman of the SEC, is set to step down January 20, the day Trump takes over as US President.
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According to the SEC complaint, after purchasing more than 5 per cent of Twitter – which Musk allegedly did on March 24, 2022 – he was required by the SEC to file a beneficial ownership report.
He filed the report April 4, 2022, according to the SEC’s complaint.
During this delayed disclosure period, Musk allegedly increased his position in Twitter from a 5 per cent stake to a 9 per cent stake, according to reports.
Musk’s lawyers were quoted as saying in media reports that SEC cannot bring an “actual case” against the billionaire. “As the SEC retreats and leaves office, the SEC’s multi-year campaign of harassment against Mr. Musk culminated in the filing of a single-count ticky tak complaint against Mr. Musk,” the lawyers said in a statement.
US President-elect has nominated Paul Atkins as the new SEC chief, who earlier served as SEC Commissioner and is expected to be a Trump ally.
Musk had bought Twitter for a whopping $44 billion in October 2022.
