The Securities and Exchange Commission (SEC) is accusing Elon Musk of underpaying Twitter by at least $150 million when he bought it for $44 billion in 2022 and later renamed it to X in 2023. Now Musk is taking to the same platform under scrutiny, X, to counter the SEC's claims.
In a complaint filed against Musk on Tuesday in the U.S. District Court for the District of Columbia, the SEC alleges that Musk acquired a large stock position in Twitter without filing the proper paperwork on time.
Musk accumulated a Twitter stake of more than 5% of shares outstanding by March 14, 2022, but allegedly failed to report his ownership status to the SEC within 10 calendar days, or by March 24, 2022.
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According to complainthe waited eleven days past the deadline for filing the report.
Elon Musk. Photo by Allison Robbert-Pool/Getty Images
When Musk was allegedly delaying filing documents, he bought $500 million worth of Twitter stock. The SEC accused Musk of buying shares “at artificially low prices from the unsuspecting public” with the understanding that if the public knew about his holdings, Twitter's stock price could rise and he could be required to pay more lot for the same number of shares.
Musk filed the SEC form on April 4, 2022, and Twitter's stock price rose by more than 27%. By not filing a report with the SEC by the requested date, the SEC estimated that Musk had underpaid when he bought Twitter for at least $150 million.
“Had Musk publicly disclosed his holdings in Twitter by filing a beneficial ownership report with the SEC by March 24, 2022, as required, Twitter's stock price would likely have risen significantly by then, instead of April 4 2022,” the SEC's complaint. reads.
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The SEC demanded that Musk pay a civil penalty as well as “disgorgement of his unjust enrichment.”
Elon Musk responds to the SEC
In one post on X on Tuesday, Musk criticized the SEC, calling it a “totally broken organization.”
“They spend their time on s— like this when there are so many real crimes going unpunished,” he wrote.
Musk also wrote on Wednesday that “the law must stop” and accused Democrats of taking legal action against citizens instead of “fighting real crime.”
The law must be stopped.
Instead of fighting real crime, under the Democrats, citizens are prosecuted while serious criminals go free.
In fact many of the criminals are in the government. At least for another 5 days. https://t.co/XpDgXNt8zI
— Elon Musk (@elonmusk) January 15, 2025
The SEC will soon have new leadership. Its current chairman, Gary Gensler, will step down when President-elect Donald Trump takes office on Monday. New York Times. It is unclear whether the commission's new leadership will pursue legal action against Musk.
Musk will have a role in the Trump administration. In November, Trump named Musk and Vivek Ramaswamy as co-head of a new Department of Government Efficiency aimed at shrinking the US government.
Musk is worth $427 billion at the time of writing, according to Bloomberg Billionaires Index.