Back in 2022, Tesla CEO Elon Musk had accumulated so much Twitter stock that he held more than five percent of the company’s stock. That development could have given Twitter a significant stock market boost if Musk had promptly reported his ownership, but a recent Securities and Exchange Commission (SEC) lawsuit alleges that he did not, essentially cheating investors out of more than $150 million.
The suit said that Musk had obtained more than nine percent of Twitter’s outstanding common stock by March 2022, triggering a requirement that he report the stock within 10 days. The report didn’t get filed until 11 days later, causing a 27-percent jump in the stock price. If successful, the suit asks that Musk pay a civil penalty and return profits.
The SEC’s suit states that “Because Musk failed to timely disclose his beneficial ownership, he was able to make these purchases from the unsuspecting public at artificially low prices. Investors who sold Twitter common stock during this period did so at artificially low prices and thus suffered substantial economic harm.”
Musk’s lawyers immediately disputed the claims, with attorney Alex Spiro saying that the SEC can’t bring an “actual case” because his client had done nothing wrong. He went on to accuse the SEC of a multi-year harassment campaign, chalking its lawsuit up to a problem with a single missing filing form.
[Images: Shutterstock, Tesla]
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