United States (U.S.) Securities and Exchange Commission (SEC), on Tuesday, said it was suing tech billionaire, Elon Musk, alleging he failed to disclose in a timely manner his ownership of more than five per cent of Twitter stakes ahead of taking over the company in 2022.
The SEC alleges that Musk began buying up Twitter shares in early 2022, and crossed the five per cent mark on March 14, 2022.
By law, he should have disclosed this fact publicly within 10 calendar days, but he didn’t announce that he already held nine per cent of the company until April 4 – 11 days too late, the SEC said.
According to the SEC filing, Twitter’s share price jumped by 27 per cent following the disclosure.
The agency analysed Musk’s purchases and concluded that he “underpaid by at least $150 million for his purchases of Twitter common stock in this period.”
Shareholders who sold him their shares during this time would have suffered financial losses, the suit alleges.
The SEC is demanding that Musk repay the sum – plus an additional penalty.
Musk’s lawyer, Alex Spiro, countered that the tech billionaire had “done nothing wrong.”
In a statement to the financial service Bloomberg, he also spoke of a “multi-year campaign of harassment” by the SEC against Musk.
It is unclear how the lawsuit will proceed because Musk is a close confidant of Donald Trump, who will be sworn in as the next U.S. president on January 20.
The administration changeover will also mean a change of leadership in SEC.
The current chairman of SEC, Gary Gensler, has already announced he will be resigning from the post.
Musk bought Twitter in October 2022 for $44 billion.
He then renamed the online platform X.
