Image credit: Grok/X

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of failing to disclose his significant stake in Twitter within the required timeframe, allowing him to purchase shares at "artificially low prices." The SEC claims Musk saved $150 million in share purchases as a result of the alleged violation.

Under SEC regulations, investors who acquire more than a 5% stake in a company must disclose the transaction within 10 days.

According to the complaint, Musk delayed his disclosure by 21 days, only making his share purchase public on April 4, 2022. The announcement caused Twitter’s share price to jump by over 27%, according to the SEC.

The regulator has asked a federal court in Washington, D.C., to order Musk to forfeit "unjust" profits and pay a fine. The SEC alleges Musk's actions caused "substantial economic harm to investors."

In a social media post, Musk dismissed the lawsuit, calling the SEC a "totally broken organization" and accusing it of wasting resources on his case instead of addressing more significant crimes.

His lawyer, Alex Spiro, described the lawsuit as a "sham" and "a campaign of harassment."

Musk, who eventually purchased Twitter for $44 billion in October 2022 and rebranded it as X, has had a contentious history with the SEC.

In 2018, the regulator accused him of misleading investors with a tweet claiming he had "funding secured" to take Tesla private. Musk settled that case, stepping down as Tesla’s chairman and agreeing to restrictions on his social media posts about the company.

The lawsuit against Musk comes as SEC Chairman Gary Gensler prepares to leave his role on January 20, coinciding with the return of President-elect Donald Trump to the White House. Trump has stated his intention to remove Gensler on his first day in office.

The SEC’s latest case underscores the long-standing tensions between Musk and the regulator, which have persisted across multiple administrations and highlight the challenges of regulating high-profile executives in rapidly evolving industries.

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