Internet US Securities and Exchange Commission sues Musk over Twitter takeover
The US Securities and Exchange Commission (SEC) has sued tech billionaire Elon Musk in connection with his share purchases in the takeover of Twitter in 2022. Musk's lawyer Alex Spiro countered that the tech billionaire "did nothing wrong".
15.01.2025, 01:28
15.01.2025, 01:49
SDA
The accusation: Musk did not make it public in good time that his stake exceeded the five percent mark - and was therefore able to buy more shares more cheaply.
The SEC conducted a lengthy investigation into the case. In a statement to the Bloomberg financial service, Musk's lawyer spoke of a year-long "campaign" by the SEC against Musk.
SEC: 150 million dollars saved through breach of rules
The tech billionaire began buying up Twitter shares on the market in early 2022. In the complaint, the SEC points out that his stake reached five percent on March 14, 2022. According to US rules, he should have made this public within ten calendar days. However, Musk only announced on April 4 - eleven days too late - that he already held nine percent. The share price subsequently jumped by 27 percent, as the SEC pointed out.
The authority analyzed Musk's purchases and came to the conclusion that the late mandatory disclosure had made him more than 150 million dollars cheaper. The shareholders who sold their shares to him during this period, on the other hand, had suffered financial losses. The SEC is demanding that Musk repay the sum - plus an additional penalty.
SEC gets new leadership under Trump
It remains to be seen how the lawsuit will proceed. Musk is a close confidant of Donald Trump, who will be sworn in as the next US President on January 20. And with the change in the White House, the SEC will also have new leadership. The previous head, Gary Gensler, has already announced his resignation for the day. It is therefore conceivable that the lawsuit may be dropped again quickly.
Musk spent a total of around 44 billion dollars on the purchase of Twitter, which was completed in October 2022. He sold his shares in the electric car manufacturer Tesla, which he runs, for the majority of the sum. Musk also took out loans of around twelve billion dollars. After the takeover, he transformed the service into his online platform X.
