Elon Musk to pay a $1.5m for failing to disclose initial stock purchases of Twitter without admitting to any wrongdoing.
Elon Musk has settled the US Securities and Exchange Commission (SEC) civil lawsuit without having to give up any money he allegedly saved from delaying the disclosure of his initial purchase of Twitter stock.
A trust in Musk’s name has agreed to pay a $1.5m fine in a case which saw the SEC accuse the billionaire of failing to properly disclose his initial stock purchases in Twitter (now known as X).
The civil suit was resolved without Musk admitting to any wrongdoing, and with no personal penalties, despite the billionaire supposedly profitting at least $150m through his actions.
Musk allegedly failed to disclose his 5% stake in the social media platform for 11 days back when the initial takeover bid was being deliberated in 2022. This, the lawsuit claimed, allowed him to purchase over $500m in shares at an artificially low price, before then revealling his 9.2% stake at a later date.
“They wanted $200m. Elon refused to settle. And they have dismissed the case against him,” Alex Spiro, a lawyer for Musk, told the Financial Times.
“Elon won, and a trust entity took a small fine, without admitting anything, for being some days late on a filing. Case closed,” he added.
The SEC argued that Musk should pay a civil fine as well as repay the $150m he may have saved. Musk completed the acquisition of Twitter in October 2022 in a $44bn deal, which was later became X before being folded into his AI firm xAI, now part of SpaceX.
Musk accused the SEC of violating his free speech rights by targeting him and said the delay was ‘inadvertent’.
The SEC has showed leniency to several major Trump donors in recent months, of which Musk is the most prolific contributor, chipping in over $277m. The regulator notably also dismissed large cases against crypto donors Coinbase and Kraken.
This case comes after a jury ruled that Musk was responsible for Twitter investors’ stock dropping when he bought the company, after he posted complaints about the platform being full of bots that produced spam content and created fake accounts – a move the investors said was aimed at bringing Twitter’s stock price down so that he could purchase the site at a lower price.
Musk still faces a separate shareholder lawsuit in New York.
He also recently lost a case against the World Federation of Advertisers (WFA) in which he accused advertisers of boycotting his platform.
