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US SEC Sues Elon Musk Over Late Disclosure of Twitter Stake

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The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk on Tuesday, accusing the billionaire entrepreneur of failing to promptly disclose his large stake in Twitter in 2022. The SEC claims Musk violated federal securities laws by delaying the disclosure of his initial purchase of 5% of Twitter’s common shares.

Alleged Violation of SEC Disclosure Rules

According to the SEC’s complaint, Musk took 11 days longer than required to disclose his initial Twitter purchase. Under SEC rules, investors are obligated to file within 10 calendar days once they acquire a 5% stake in a company. In Musk’s case, the deadline was March 24, 2022, but he waited until April 4, 2022, to reveal that he had accumulated a 9.2% ownership stake in the social media platform.

The delay, the SEC argued, allowed Musk to buy over $500 million worth of Twitter shares at artificially low prices, before the public learned of his purchases. This led to a surge in Twitter’s stock price, which rose by more than 27% following Musk’s disclosure.

SEC’s Legal Action

The lawsuit seeks to force Musk to pay a civil fine and return profits that were deemed unearned due to his delayed disclosure. This legal action comes after Musk ultimately acquired Twitter in October 2022 for $44 billion, later rebranding the platform as X.

Musk’s lawyer, Alex Spiro, dismissed the lawsuit as part of a “multi-year campaign of harassment” by the SEC. He argued that the case was based on an administrative failure to file a single form, which, even if proven, would warrant only a minor penalty. Spiro further claimed that Musk had done nothing wrong and that the lawsuit was baseless.

Musk’s Legal Troubles Over Twitter Acquisition

Musk has faced multiple lawsuits related to his Twitter purchase, including another one filed by former Twitter shareholders over the late disclosure. Musk has defended his actions, claiming that the delay was unintentional and that there was no intent to deceive other shareholders.

This latest lawsuit against Musk by the SEC follows a history of contentious interactions between the billionaire and the regulator. In 2018, the SEC sued Musk over his Twitter posts regarding the potential privatization of Tesla. Musk settled the case by paying a $20 million fine and agreeing to have Tesla lawyers pre-approve certain tweets.

In addition to this new lawsuit, Musk has faced other SEC scrutiny, including a request for sanctions after he missed court-ordered testimony related to the Twitter investigation. A federal judge in San Francisco ultimately rejected the SEC’s request for sanctions, as Musk later testified and agreed to cover the SEC’s travel expenses.

Political Timing of the Lawsuit

The lawsuit comes just days before Donald Trump’s second presidential term begins, and some speculate that Musk’s legal battles could be affected by the shift in administration. SEC Chair Gary Gensler, who has clashed with Musk in the past, is stepping down as Trump takes office, with Paul Atkins nominated to replace him. The new leadership at the SEC could potentially review past actions and enforcement measures, including those involving Musk.

Conclusion

The SEC’s lawsuit is another chapter in Musk’s long-standing legal battles with the regulator, centered on his handling of Twitter stock and his broader business ventures. The outcome of the case could have significant implications for Musk’s future dealings with the SEC, particularly concerning timely disclosures of stock purchases.

 

SEC Reopens Probe Into Neuralink Amid Musk’s Legal Battles

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The U.S. Securities and Exchange Commission (SEC) has reopened its investigation into Neuralink, the brain-chip startup founded by Elon Musk, according to a letter shared by Musk on social media platform X. The letter, dated December 12, was from Musk’s lawyer, Alex Spiro, and addressed to outgoing SEC Chair Gary Gensler. It revealed that the SEC had issued a 48-hour settlement deadline to Musk regarding his $44 billion acquisition of Twitter (now rebranded as “X”), which could result in charges if Musk does not accept the monetary settlement offered.

The amount of the settlement was not disclosed, and the letter emphasized that Musk and his legal team would not be “intimidated” by the SEC. This latest development follows Musk’s ongoing legal disputes with the agency, including an investigation into his 2022 Twitter acquisition. Last year, lawmakers called for an investigation into Musk’s handling of Neuralink’s brain implants, questioning whether Musk misled investors about their safety, but it remains uncertain how much legal traction the SEC could gain in such actions against the entrepreneur.

Musk, who also leads Tesla and SpaceX, has had a contentious relationship with the SEC. Notably, a federal judge in November dismissed the SEC’s request to sanction Musk for failing to appear in court regarding his Twitter takeover. This is just one of several legal entanglements Musk faces, including a 2018 settlement over misleading tweets about Tesla’s privatization.

Despite the SEC’s renewed interest, Musk’s legal defense, supported by his influence and financial power, may provide significant resistance to any potential actions or regulations targeting his ventures, including Neuralink.

Trump’s Golf Empire Flourishes in Florida Despite Legal Troubles and Real Estate Declines

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Former President Donald Trump’s business empire has experienced a significant shift, with his Florida-based golf resorts emerging as a financial lifeline amid mounting legal challenges and a faltering New York real estate market. Trump’s golf clubs, particularly in Florida, now account for the bulk of his company’s cash flow, generating around four-fifths of the estimated $80 million net income for 2024. Once a cash drain, these properties have flourished, capitalizing on Trump’s popularity with affluent supporters, particularly in the state’s pro-Trump strongholds.

Mar-a-Lago, the crown jewel of Trump’s business, is set to generate around $24 million in 2024, while three other Florida properties are also thriving. Trump’s Jupiter and West Palm Beach clubs are set to generate $8.4 million and $10.4 million, respectively. Meanwhile, his largest golf resort, Trump National Doral in Miami, is expected to bring in $10.5 million. These figures highlight a strong recovery for the Trump Organization’s golf operations post-pandemic, positioning the resorts as a reliable cash source.

However, Trump’s broader business dealings face more precarious circumstances. His New York properties, particularly 40 Wall Street, are grappling with a declining commercial real estate market. Trump also faces over $530 million in court judgments and interest from legal battles, including a high-profile fraud case in New York. The Trump Organization has shifted several entities to Florida in an attempt to evade some of these legal hurdles, but a judge blocked the reorganization, keeping the company under close judicial scrutiny.

While Trump’s golf empire flourishes in Florida, the outlook for his New York assets is clouded by a sluggish real estate market, with major debts coming due in 2025. Despite these challenges, Trump remains a potent figure in both the business and political worlds, with his 2024 income projections boosted largely by his flourishing resorts. Florida’s golf boom, combined with Trump’s enduring brand appeal, is keeping his business afloat as he navigates turbulent legal and financial waters.