SEC Sues Elon Musk Alleging Rule Violation in Twitter Stake Purchase

The Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk on Tuesday, accusing the billionaire of breaching securities laws during his acquisition of Twitter shares in 2022.

The complaint alleges Musk failed to properly disclose his ownership in the company, enabling him to purchase shares at what the SEC claims were “artificially low prices.”

SEC Accusations Surrounding Musk’s Twitter Purchase

According to the SEC’s filing in the U.S. District Court for Washington, D.C., Musk violated disclosure requirements by not reporting his Twitter holdings, which had exceeded the 5% threshold mandated by law.

The delay in reporting allegedly allowed Musk to underpay by at least $150 million for additional shares.

Musk, who later acquired Twitter for $44 billion and rebranded it as X, built a substantial stake in the social media platform before initiating the buyout.

The SEC has been investigating whether Musk or any associates engaged in securities fraud linked to the acquisition.

This includes scrutiny of transactions involving Tesla shares, which Musk sold to finance the purchase.

In a statement made on X last month, Musk alleged that the SEC pressured him to accept a settlement within 48 hours, which included fines for alleged violations.

Alex Spiro, Elon Musk’s lawyer, called the SEC’s allegations baseless. In a statement, he described the lawsuit as a “sham” and part of a long-standing campaign against Musk.

“Musk has done nothing wrong,” Spiro said, adding that the charges were a “single-count ticky-tack complaint.”

Recent Algorithm Controversy Adds to Scrutiny

Musk’s actions as the head of X have continued to generate controversy. Earlier this month, he announced plans to prioritize “informative” or “educational” content on the platform to combat negativity.

Critics argue that this could suppress diverse viewpoints, with some accusing Musk of using these changes to censor specific groups.

The controversy has also extended to allegations of censorship involving political debates.

For instance, Musk faced backlash after critics claimed he removed premium features from accounts opposing his proposed U.S. immigration reforms.

These disputes have drawn warnings from figures like Ethereum co-founder Vitalik Buterin, who cautioned against policies that could undermine free speech.

German Authorities Accuse Elon Musk of Interfering in Election Politics

Musk’s conduct has not been without consequences on the global stage.

German authorities recently accused him of attempting to sway the country’s upcoming elections by endorsing Alternative für Deutschland (AfD), a far-right political party.

Musk’s endorsement of the group has triggered backlash from officials, with German Chancellor Olaf Scholz often facing criticism from Musk on X.

Despite backlash, Musk has defended his actions, citing his right to express opinions as a business operator in Germany.

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