Biden administration sues Elon Musk over his 2022 purchase of Twitter
According to the Securities and Exchange Commission (SEC), Musk's purchase violated securities laws by accumulating several shares of the company's stock without filing a proper notice.
Musk acquired X (then Twitter) in October 2022/ Bartosz Siedlik.
The Biden administration is suing Elon Musk over his purchase of Twitter (now X) in 2022. The lawsuit, formally made by the Securities and Exchange Commission (SEC), will be one of the last actions taken by Gary Gensler, who will leave his post at the SEC in the face of the second Trump administration.
The lawsuit has already been formally filed in federal court in Washington, although its fate is uncertain given the imminent change of government. The president-elect has already nominated Paul Atkins to succeed Gensler. Atkins held the post between 2002 and 2008 in the George W. Bush administration.
According to the argument, Musk's purchase violated securities laws by accumulating several company shares without filing the appropriate notice. The lawsuit alleges that he waited eleven days to file a disclosure.
One of the SEC's rules says investors must disclose this within ten calendar days when they cross 5% of the stock. "The SEC said Musk did not disclose his stake until April 4, 2022, 11 days after the deadline, by which time he owned more than 9% of Twitter's shares," Reuters noted.
Alex Spiro, one of Musk's lawyers, trivialized the lawsuit and wrote the following in an email, "Mr. Musk has done nothing wrong and everyone sees this sham for what it is."
"Musk paid significantly less for the shares of Twitter common stock he purchased between March 25, 2022 and April 1, 2022 than if he had timely disclosed," the lawsuit reads, which would have caused "Twitter's stock price to increase more than 27%."
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