Important points
The SEC sued Elon Musk for failing to disclose his purchase of Twitter stock before acquiring the platform. Musk’s lawyers have argued that the SEC’s lawsuit is baseless, suggesting no wrongdoing took place.
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According to a Jan. 14 filing first shared, the U.S. SEC determined in a timely manner that Elon Musk purchased more than 5% of Twitter (now X) stock before acquiring the social media platform. Filed a lawsuit in federal court against Elon Musk for failing to disclose information. From DB News.
According to the complaint, Musk began buying Twitter stock in early 2022 and exceeded the 5% threshold in March. Under federal securities regulations, he is now legally obligated to report his stock holdings to the SEC within 10 days. The SEC revealed that Musk did not fulfill this obligation until April 4, 2022, an 11-day delay.
Musk completed his acquisition of Twitter in October of the same year in a $44 billion deal and changed the company’s name to “X.”
The SEC alleges that because Musk did not disclose his stock holdings and the market was unaware of his holdings or investment intentions, he was able to purchase additional shares at artificially low prices. I am doing it. The complaint estimates that Musk underpaid by at least $150 million for the stock acquired during this private period.
“Mr. Musk’s violations resulted in significant economic harm to investors who sold Twitter common stock between March 25, 2022 and April 1, 2022,” the SEC said in its complaint. There is. “These investors did not know that Mr. Musk had accumulated more than 5% of Twitter’s common stock or Mr. Musk’s overall investment objectives, and the market had not yet priced in this important information. , and sold the stock at an artificially low price.”
Securities regulators are seeking a court order for Musk to be disenfranchised, pay a civil penalty and be permanently barred from future securities law violations.
Musk’s lawyer, Alex Spiro, said the SEC would not pursue an “actual lawsuit” because Musk “did nothing wrong and everyone sees this charlatanism as normal.” The lawsuit was dismissed, saying it was an “admission” that it could not be filed.
“As the SEC retreats and steps down, the SEC’s multi-year harassment campaign against Mr. Musk ends with the filing of a single complaint against Mr. Musk under Section 13(d) for alleged administrative failures. culminated in a single form of crime that carries a nominal penalty even if proven,” Spiro said in a statement to Bloomberg.
Musk has not yet commented on the lawsuit.
This is a developing story.
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