The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against billionaire Elon Musk regarding irregularities associated with his acquisition of the social media platform Twitter in 2022. The regulatory agency has accused the South African-born entrepreneur of violating securities laws during the purchase of what is now known as X. This investigation, which was initiated three years ago, has culminated in legal action just days before Donald Trump is set to assume the presidency, a transition that may lead to a change in the SEC’s leadership, potentially allowing the new director to dismiss the lawsuit.
The SEC alleges that Elon Musk failed to disclose, within the required timeframe, that he was acquiring a significant stake in Twitter. Following this, Musk made a bid to purchase the company for $44 billion. The regulatory body is expected to impose a fine along with the recovery of illegally obtained profits. According to the SEC, the penalty against Musk could exceed $150 million.
The lawsuit against Elon Musk appears to be largely symbolic, as the impending change in SEC leadership could result in the dismissal of the case. Musk, who has been a prominent financial supporter of Donald Trump‘s campaign, has even been nominated for a position in the future administration. Given this context, it is highly likely that the SEC’s action may not lead to significant consequences for the billionaire.
Reports indicate that Musk concealed his substantial stake in Twitter, which enabled him to purchase additional shares at what were described as “artificially low” prices. The SEC’s lawsuit contends that this maneuver allowed Musk to pay at least $150 million less for shares than he would have if he had disclosed his actions in a timely manner. The agency believes that Musk acted intentionally to gain an unfair advantage in the market.
