Elon Musk Seeks Dismissal of SEC Lawsuit Over Twitter Stake Disclosure
Washington D.C. – Elon Musk is challenging a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) alleging he improperly delayed disclosing his significant stake in twitter (now X) in 2022. According to a report by Reuters, the SEC contends that Musk’s 11-day delay in reporting his 5% ownership allowed him to accumulate additional shares at a lower cost, resulting in approximately $150 million in savings – funds the agency argues should have gone to other investors.
In a filing submitted Thursday night to a federal court in Washington, D.C., musk’s legal team asserted the delay was unintentional. They claim Musk promptly disclosed his growing ownership once advised by counsel of the reporting requirement, revealing a 9.2% holding on April 4, 2022, just one buisness day after receiving confirmation of his filing obligations from his wealth manager and attorneys.
The SEC is seeking to compel Musk to relinquish the alleged $150 million profit and pay a significant civil penalty. Musk, however, argues the proposed penalty is excessive and unconstitutional, citing the Eighth Amendment. he points to previous, similar cases where fines have been substantially lower, typically around $100,000.
Musk has further accused the SEC of “selective enforcement,” suggesting the lawsuit is retaliatory due to his prior criticisms of the agency.”There is no ongoing violation. There is no intent. There is no harm,” Musk stated in the filing, adding that the case represents a wasteful use of judicial and taxpayer resources. The SEC countered that intent is irrelevant, emphasizing Musk’s violation of investor protection disclosure rules.
This isn’t the first clash between Musk and the SEC. In 2018, the agency sued him over misleading tweets regarding a potential Tesla privatization, resulting in a $20 million fine and increased oversight of his social media activity. The current case, SEC v. Musk, case number 25-00105, is being heard in the U.S. District Court for the District of Columbia.
Musk acquired Twitter outright in October 2022 for $44 billion,afterward rebranding the platform as X.
Related: Musk’s X Corp Hit With Antitrust Lawsuit From startup Eliza Labs
Source: Reuters
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