WASHINGTON — Just days ahead of Donald Trump’s inauguration as the 47th US
President, the Securities and Exchange Commission (SEC) has filed a lawsuit
against his best ally Elon Musk over an alleged securities violation relating
to his acquisition of Twitter (now called X) in 2022.
The SEC lawsuit alleged that the tech billionaire “failed
to disclose his 5 per cent ownership stake of Twitter in a timely manner”,
violating federal securities law.
The complaint, filed in federal court in Washington, DC,
also claimed that the Tesla and SpaceX owner “waited to disclose the
acquisition in order to build up a larger position in Twitter at a discounted
price”, said reports.
The lawsuit against Musk came as Gary Gensler, Chairman
of the SEC, is set to step down on January 20, the day Trump takes over as US
President.
According to the SEC complaint, after purchasing more
than 5 per cent of Twitter – which Musk allegedly did on March 24, 2022 – he
was required by the SEC to file a beneficial ownership report.
He filed the report April 4, 2022, according to the SEC’s
complaint.
During this delayed disclosure period, Musk allegedly
increased his position in Twitter from a 5 per cent stake to a 9 per cent stake,
according to reports.
Musk’s lawyers were quoted as saying in media reports
that SEC cannot bring an “actual case” against the billionaire. “As the SEC
retreats and leaves office, the SEC’s multi-year campaign of harassment against
Mr. Musk culminated in the filing of a single-count ticky tak complaint against
Mr. Musk,” the lawyers said in a statement.
US President-elect has nominated Paul Atkins as the new
SEC chief, who earlier served as SEC Commissioner and is expected to be a Trump
ally.
Musk had bought Twitter for a whopping $44 billion in
October 2022.
