Tesla (TSLA, Financial) CEO Elon Musk has been sued by the U.S. Securities and Exchange Commission (SEC) for securities fraud over a purchase of Twitter, now X. The suit, filed late Tuesday in federal court in Washington, D.C., alleges that Musk didn't disclose his 5% stake in Twitter as soon as he had to, ‘artificially low prices,' and underpaid by at least $150 million.
However, he reportedly delayed disclosure of his ownership for 11 days, during which he bought over $500 million more of those shares. When he finally disclosed his 9% stake in Twitter, the stock price jumped 27% off the previous close. A delay, the SEC says, lettered Musk to profit on artificially low prices as others shareholders were disadvantaged.
Musk's legal representative Alex Spiro dismissed the SEC's case as a tiny procedural point and called it a 'ticky tack complaint' saying that the agency's why harassment.' Musk['s] actions are the opposite of overreach, said Spiro, and he had 'done nothing wrong.'
It is not the first trip this has been for Musk with the SEC. Last year, the agency investigated possible securities fraud and insider trading involving Musk and his brother, Kimbal Musk, in connection with Tesla stock trades.
Musk's complex history of regulatory entanglements is racking up when it comes to the SEC's latest action, which comes as the billionaire juggles his Tesla, SpaceX and X leadership.
