Elon Musk Faces SEC Lawsuit Over Twitter Acquisition

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Elon Musk has been sued by the U.S. Securities and Exchange Commission (SEC) over his acquisition of Twitter, now rebranded as X. The SEC alleges that Musk failed to disclose his ownership of Twitter stock in a timely manner in early 2022, allowing him to underpay by at least $150 million for shares he bought after surpassing a 5% ownership threshold.

Musk began purchasing Twitter shares in early 2022 and, by March, owned more than 5% of the company's stock. According to the SEC, Musk was legally required to disclose this ownership but delayed doing so until April 4, 11 days past the deadline. The lawsuit claims this delay gave Musk an unfair financial advantage during his subsequent acquisition of Twitter in October 2022.

Musk's attorney, Alex Spiro, dismissed the lawsuit as baseless, describing it as a “sham” and an indication that the SEC lacks a substantial case. "This lawsuit is an admission by the SEC that they cannot bring an actual case since Mr. Musk has done nothing wrong," Spiro said, adding that even if the charges are proven, they carry only a nominal penalty.

The legal saga began in April 2022 when Musk signed a deal to acquire Twitter but later attempted to back out, prompting the company to sue him to complete the acquisition. The SEC's lawsuit stems from an investigation into whether Musk violated securities laws through his Twitter stock purchases and related disclosures.

Before filing the lawsuit, the SEC sought to compel Musk to testify as part of its investigation. The agency's current chair, Gary Gensler, is set to step down on January 20, leaving the future of the case uncertain under the incoming administration.

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