Billionaire tech magnate Elon Musk was sued on 14^th January 2025 (Tuesday) by the U.S. Securities and Exchange Commission (SEC), which accused the world’s wealthiest person of waiting 11 days more than stipulated to make the disclosure in the year 2022 that he had amassed a stake above 5% in Twitter, the social media company he later bought. In a complaint filed in Washington, D.C. federal court, the SEC said the billionaire tech magnate violated federal securities law by waiting 11 days more than stipulated to reveal his initial crossing of 5% ownership threshold in twitter.

An SEC rule necessitates investors who cross 5% ownership threshold in any company to make disclosure of the same within 10 days of crossing the threshold. when they cross a 5% ownership threshold. In Musk’s case, 24^th March 2022 was the last date for making the disclosure about crossing 5% ownership threshold in twitter but he made the disclosure only on 4^th April 2022 (11 days late), by which time his stake in twitter had reached 9.2%. Twitter’s share price jumped more than 27% following that disclosure, the SEC stated.

SEC lawsuit alleges that the billionaire tech magnate was able to buy twitter shares at “artificially low prices” by delaying disclosure by 11 days, saving $150m in share purchases as a result. According to SEC, at the expense of unsuspecting investors, Musk bought over $500 million of Twitter shares at artificially low prices before finally disclosing his purchases on April 4, 2022, by which time he already owned a 9.2% stake. Tuesday’s lawsuit seeks to force the billionaire tech magnate to pay a civil fine and disgorge profits he no way deserved.

Alex Spiro, a lawyer for Elon Musk, in an email termed the SEC lawsuit the culmination of the regulator’s “multi-year campaign of harassment” against his client. “Today’s action is an admission by the SEC that they cannot bring an actual case,” he said. “Mr. Musk has done nothing wrong and everyone sees this sham for what it is.” Spiro added that the suit addresses a mere “alleged administrative failure to file a single form–an offense that, even if proven, carries a nominal penalty.”

In a post on his social media platform X, the billionaire tech magnate termed the SEC a “completely destroyed organisation”. He also accused SEC of wasting time because “there are so many real crimes that go unpunished”. The SEC suing Musk just six days before Trump’s inauguration on the 20th of January seems a questionable act. Though, former Twitter shareholders have also sued Musk in Manhattan federal court for delayed disclosure of his large Twitter stake. Musk argued that the delay in making the disclosure was merely a mistake and not a deliberate attempt to mislead shareholders.