Elon Musk is being sued by the U.S. Securities and Exchange Commission (SEC) for allegedly violating securities laws related to his purchase of Twitter shares in 2022. The SEC claims Musk waited 11 days beyond the required 10-day window to disclose that he had acquired more than 5% of Twitter’s common shares. According to SEC regulations, investors must inform the public of their significant stake within 10 calendar days of reaching the 5% ownership threshold. The SEC argues that this delay allowed Musk to buy additional Twitter shares at artificially low prices before his eventual disclosure on April 4, 2022. By then, Musk owned a 9.2% stake in Twitter, and the company's stock price surged more than 27% following the announcement.The lawsuit seeks to force Musk to pay a civil fine and disgorge the profits he allegedly gained by failing to disclose his stake sooner. The SEC’s complaint suggests that Musk’s delay harmed unsuspecting investors, who could have bought shares at a lower price had they known about his growing stake earlier. Musk, who later purchased Twitter for $44 billion and renamed it X, has defended his actions. His lawyer, Alex Spiro, argued that the lawsuit was an overblown response to a minor administrative issue—the late filing of a single form—which, even if proven, would result in a minimal penalty. Musk’s legal team views the lawsuit as part of a broader “campaign of harassment” by the SEC.
Musk’s legal troubles over his Twitter purchase are compounded by additional lawsuits from former Twitter shareholders, who argue that the delayed disclosure negatively affected their investments. Musk has insisted that the delay was an unintentional mistake, not an attempt to defraud shareholders. This latest lawsuit adds to Musk's long-running history of legal conflicts with the SEC, including a 2018 case regarding his tweets about taking Tesla private. That case resulted in a $20 million fine and an agreement that Tesla would review Musk's social media posts. Despite the ongoing legal battles, Musk continues to be one of the world’s wealthiest individuals, with major stakes in Tesla and SpaceX.