SEC Files Lawsuit Against Elon Musk for Alleged Breach of Regulations in Twitter Investment

The Securities and Exchange Commission (SEC) initiated a lawsuit against Elon Musk on Tuesday, alleging that the billionaire violated securities regulations during his acquisition of Twitter shares in 2022.

JUST IN: SEC sues Elon Musk over alleged securities violations, days before Gary Gensler is set to resign.

— Watcher.Guru (@WatcherGuru) January 14, 2025

The complaint claims that Musk failed to adequately disclose his ownership in the company, allowing him to acquire shares at what the SEC asserts were “artificially low prices.”

SEC Allegations Regarding Musk’s Twitter Acquisition

According to the SEC’s filing in the U.S. District Court for Washington, D.C., Musk breached disclosure obligations by not reporting his Twitter holdings, which surpassed the 5% threshold required by law.

This reporting delay allegedly enabled Musk to underpay by at least $150 million for additional shares.

Musk, who subsequently purchased Twitter for $44 billion and rebranded it as X, established a significant stake in the social media platform prior to initiating the buyout.

The SEC has been examining whether Musk or any associates participated in securities fraud related to the acquisition.

This includes an investigation into transactions involving Tesla shares, which Musk sold to fund the acquisition.

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

Oh Gary, how could you do this to me? pic.twitter.com/OoooQI77ZS

— Elon Musk (@elonmusk) December 12, 2024

Alex Spiro, Elon Musk’s attorney, described the SEC’s claims as unfounded. In a statement, he characterized the lawsuit as a “sham” and part of a long-standing campaign against Musk.

“Musk has done nothing wrong,” Spiro stated, 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 spark controversy. Earlier this month, he announced plans to prioritize “informative” or “educational” content on the platform to combat negativity.

@ElonMusk’s announcement about changes to X’s social media algorithm has ignited widespread controversy, sparking accusations of censorship.#ElonMusk #Censorshiphttps://t.co/6JNA8HXLo2

— Cryptonews.com (@cryptonews) January 5, 2025

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

The controversy has also extended to allegations of censorship related to political discussions.

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

These disputes have prompted 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 behavior has not been without repercussions on the international stage.

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

Germany is accusing Department of Governmental Efficiency (DOGE) co-chair and Donald Trump associate Elon Musk of election interference.#ElonMusk #DonaldTrumphttps://t.co/uFwa83XyZC

— Cryptonews.com (@cryptonews) December 30, 2024

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

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

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