SEC Charges Elon Musk With “Ill-Gotten Gains” From Late Disclosure Of Initial Twitter Investment

deadline.com:

The Securities and Exchange Commission filed an action against Elon Musk dating back to his 2022 acquisition of Twitter, now X.

alleging that he was “enriched” to the tune of $150 million by not reporting a stake he had amassed in the social media platform within a required five day window and, instead, buying more stock.

His gain came at the expense of other Twitter shareholders, the Commission said. Had his initial investment been made public in time, the stock would have risen (as it did later) and Musk’s subsequent investment would have cost him more.

Likewise, shareholders who sold before Musk disclosed his stake received a lower price. SEC rules give investors a five-day window to report a 5% or more ownership position in a public company but Musk took longer, “in violation of the beneficial ownership reporting requirements” under the Securities Exchange Act.