Elon Musk, Close Confidant of Trump, Faces Lawsuit Over Twitter Takeover

The U.S. Securities and Exchange Commission (SEC) announced on Tuesday that it is suing tech billionaire Elon Musk for failing to disclose in a timely manner his ownership of more than 5 percent of Twitter’s shares prior to his acquisition of the company in 2022.

According to the SEC, Musk began purchasing Twitter shares in early 2022 and surpassed the 5 percent threshold on March 14, 2022. By law, he was required to publicly disclose this within 10 calendar days.

However, Musk did not reveal that he had acquired 9 percent of the company until April 4, 2022, which was 11 days after the legally required deadline, the SEC claimed.

The SEC filing indicates that Twitter’s share price increased by 27 percent after Elon Musk’s delayed disclosure of his stake.

The agency analyzed Musk’s stock purchases and concluded that he “underpaid by at least $150 million” for the shares during that period. The lawsuit claims that shareholders who sold their shares to Musk during this time experienced financial losses. As a result, the SEC is seeking to have Musk repay the $150 million, along with an additional penalty.

Elon Musk’s lawyer, Alex Spiro, responded by asserting that Musk had “done nothing wrong” and criticized the SEC for engaging in a “multi-year campaign of harassment” against the billionaire. It remains unclear how the lawsuit will unfold, especially with the upcoming change in U.S. presidential leadership.

As Donald Trump prepares for his swearing-in on January 20, 2025, the SEC is also set to undergo a leadership shift. The current SEC Chairman, Gary Gensler, has already announced his resignation. Musk, who purchased Twitter in October 2022 for $44 billion, subsequently rebranded the platform as “X.”