The SEC recently sued Elon Musk over his ownership of Twitter. This lawsuit has greatly intrigued many people who wish to learn why the Space X founder found himself amid legal proceedings. Musk had purchased Twitter in 2022 for $44 billion.
Here is the SEC’s lawsuit against Elon Musk explored.
Reason why SEC is suing Elon Musk
The SEC filed a lawsuit against Elon Musk on Tuesday for his alleged failure to properly disclose his ownership of Twitter as mandated by federal law, allowing him to purchase Twitter shares at artificially low prices before his $44 billion acquisition of the platform.
The SEC filing stated that Musk had acquired over 5% of Twitter’s common stock by March 14, 2022. It added that he had to disclose that information within 10 days, which he failed to do. Musk disclosed the information on April 4, 2022, which was 11 days past the due date.
The lawsuit added that because Musk kept his purchases of Twitter shares at low prices, he underpaid investors by $150 million.
In a statement to multiple outlets, Musk’s lawyer, Alex Spiro, stated that the SEC lawsuit was nothing but a “sham.” He also called it an admission of their inability to bring a proper case forward. He also claimed that his client had “done nothing wrong.”
Musk has also levied criticism against the SEC in multiple X posts. Two months ago, he said on X that the SEC was simply a “weaponized institution” engaged in “political dirty work.”
The following day, he shared a screenshot of a letter his lawyer wrote to SEC chair Gary Gensler on X. Gensler announced his departure from the post on January 20, following Donald Trump’s vow to fire him after assuming office. This letter revealed that the SEC had demanded Musk to pay an undisclosed sum to them to settle charges of his Twitter share purchases or risk facing charges on numerous counts.
Today, he called the agency a “totally broken organization.” He stressed how their focus on his case was misplaced when they should instead be focusing on many other unpunished crimes.
Originally reported by Abdul Azim Naushad on ComingSoon.
