SEC Sues Musk Over Twitter Stock Purchases

The Securities and Exchange Commission on Tuesday sued Elon Musk over allegations he misled shareholders about his Twitter stock purchases, escalating the agency’s long-simmering feud with the billionaire.

The Wall Street Journal reports the SEC’s lawsuit, filed in federal court in the District of Columbia, says Musk’s delayed disclosure of his ownership allowed him to save more than $150 million on buying Twitter stock. 

The late disclosure hurt investors who sold at artificially low prices because they didn’t know about Musk’s plans, the SEC says. 

The lawsuit comes after a long investigation that Musk sometimes delayed by not appearing for testimony. Musk, now closely aligned with President-elect Donald Trump, will likely ask the commission’s next leader to withdraw the case, teeing up a major test of the agency’s independence from the White House.

Elon Musk, the CEO of Tesla and SpaceX, has been involved in a long-standing legal battle with the Securities and Exchange Commission (SEC). 

Here's a brief overview:

Background: In August 2018, Musk tweeted that he was considering taking Tesla private and had secured funding to do so. The tweet caused Tesla's stock price to surge, and the SEC subsequently launched an investigation.

Initial Lawsuit (2018): The SEC filed a lawsuit against Musk in September 2018, alleging that his tweet was misleading and had manipulated the stock market. The SEC sought to bar Musk from serving as an officer or director of a publicly traded company.

Settlement (2018): Musk and the SEC reached a settlement in October 2018. As part of the agreement, Musk:

• Stepped down as Tesla's chairman for three years
• Paid a $20 million fine
• Agreed to have his tweets reviewed by a Tesla lawyer before posting

Contempt Charges (2019): In February 2019, the SEC filed a contempt charge against Musk, alleging that he had violated the settlement agreement by tweeting about Tesla's production numbers without having the tweet reviewed by a lawyer.

Revised Settlement (2019): Musk and the SEC revised the settlement agreement in April 2019. The revised agreement required Musk to have his tweets reviewed by a Tesla lawyer before posting if they contained material information about the company.

Ongoing Disputes: Musk has continued to clash with the SEC over his tweets and other issues. In 2022, Musk's lawyers argued that the SEC was harassing him and attempting to stifle his free speech.
The legal battle between Musk and the SEC remains ongoing, with both sides continuing to dispute the terms of the settlement agreement and the limits of Musk's freedom to tweet about Tesla and other topics.