“Elon Musk Faces SEC Lawsuit Over Unreported Twitter Stake Prior to Acquisition, Saving 210 Billion Won on Stock Purchase.”
(San Francisco = Yonhap News) Correspondent Kim Tae-jong reports that the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Tesla CEO Elon Musk over accusations of securities fraud in relation to his acquisition of the social media platform X, formerly known as Twitter.
The SEC alleges that Musk violated the obligation to disclose when holding more than a certain percentage of shares, allowing him to purchase stock at a lower price.
According to Bloomberg News on the 14th (local time), the SEC’s complaint states that Musk held over a 5% stake in Twitter before acquiring it in 2022 but failed to disclose this information in a timely manner, violating disclosure obligations.
It is claimed that Musk was able to save approximately $150 million (about 218.9 billion won) by purchasing additional shares before investors became aware of his stake exceeding 5%. Had Musk disclosed his holdings, the stock price would have risen, requiring him to pay a higher cost.
The SEC has been investigating whether Musk committed securities fraud while selling Tesla shares and acquiring Twitter stock prior to the acquisition in 2022.
Last month, Musk claimed in a post on X that the SEC had pressured him to accept a settlement, including fines, within 48 hours, or face multiple charges.
The lawsuit was filed just six days before the inauguration of “Trump 2.0.” SEC Chairman Gary Gensler has already announced his resignation on the inaugural day of January 20 but filed the lawsuit against Musk just before stepping down.
Musk’s attorney, Alex Spiro, stated that “this lawsuit is frivolous and a result of years of harassment.”
Musk has been nominated as co-head of the Government Efficiency Department (DOGE) of the Trump 2.0 administration and has emerged as a significant power figure due to his close ties with President-elect Trump during the election process.