The Securities and Exchange Commission (SEC) filed a civil lawsuit on Tuesday against Elon Musk for securities fraud in the 2022 purchase of the social network Twitter, renamed X.
The financial regulator’s lawsuit claims that Musk failed to report the accumulation of an active stake in Twitter as he was required to do, which would have allowed him to acquire shares at “artificially low prices.”
This action by the SEC comes six days after the still president, Joe Biden, leaves power.
Musk bought Twitter for $44 billion in 2022, but at the beginning of that year he would have accumulated 9% of the shares, without disclosing it publicly in time.
Read: TikTok calls the sale to Elon Musk ‘pure fiction’ to avoid its closure in the US
SEC rules require disclosure of a stake greater than 5% in a company within a 10-day period, something Musk did not do.
That allowed him to continue buying shares worth about $500 million, saving about $150 million, according to the SEC.
The regulator, which filed the lawsuit in federal court in the District of Columbia, asks that Musk be sentenced to return the unfair profits obtained and pay a fine.
A lawyer for Musk, Alex Spiro, said in a statement that his client “has done nothing wrong” and called the lawsuit a “fraud.”
Since purchasing Twitter, Musk became involved in US and international politics and became a major donor to Donald Trump’s presidential campaign.
The president-elect has promised an influential role for Musk, who will lead an advisory body dedicated to cutting public spending and regulations.
With information from EFE
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