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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.

 

Trump’s USDOT Nominee Confirms Continuation of Tesla Safety Investigations

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President-elect Donald Trump’s nominee for the U.S. Department of Transportation (USDOT), Sean Duffy, confirmed that ongoing investigations into Tesla’s advanced driver assistance system will continue under his leadership. During a U.S. Senate hearing, Duffy expressed his commitment to allowing the National Highway Traffic Safety Administration (NHTSA) to complete its probe into Tesla’s Full Self-Driving (FSD) software, which is under investigation after four collisions, including a fatal crash in 2023.

The investigation involves 2.4 million Tesla vehicles equipped with the FSD software, and Duffy assured lawmakers that the probe would proceed without interference. Senator Ed Markey pressed Duffy to ensure that NHTSA would operate independently, regardless of political pressures, to which Duffy responded, “I will let NHTSA do their investigation.”

Tesla, which did not respond immediately to requests for comment, has faced increased scrutiny over its driver-assistance systems as the company transitions toward self-driving technology. In addition to the FSD investigation, NHTSA recently launched a separate inquiry into 2.6 million Tesla vehicles concerning a feature called Actually Smart Summon. This system, which allows users to remotely move their cars, has been linked to crashes due to failure to detect obstacles or parked vehicles, prompting further concern over Tesla’s safety protocols.

In December 2023, Tesla recalled over 2 million U.S. vehicles to address safety issues related to the Autopilot system. NHTSA is still investigating whether the recall measures sufficiently mitigate the risk of driver inattention.

Duffy also mentioned that he would review the Federal Aviation Administration’s proposed fine of $633,000 against Musk’s SpaceX for violations of launch license regulations.

 

Tesla Cybertruck Burst into Flames Outside Trump Las Vegas Hotel, Driver Killed

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A shocking incident unfolded outside the Trump International Hotel in Las Vegas on Wednesday when a Tesla Cybertruck erupted in flames, resulting in the death of the driver and injuries to seven others. The explosion caught the attention of both locals and visitors, as videos from witnesses showed the vehicle engulfed in flames while it remained stationed outside the hotel. Authorities have launched an investigation into the cause of the blast, with the FBI looking into the possibility of terrorism as a factor.

The Trump International Hotel, which is part of the Trump Organization, is closely associated with President-elect Donald Trump, who is set to return to the White House on January 20. The timing of the explosion has raised questions, especially considering Tesla CEO Elon Musk’s strong support for Trump during the 2024 presidential campaign, as well as his advisory role to the incoming administration. As the investigation continues, many are speculating about any potential connection between the explosion and the political figures involved.

Las Vegas Metropolitan Police Department Sheriff Kevin McMahill addressed the media, acknowledging the unusual nature of the incident. “Obviously a Cybertruck, the Trump hotel—there’s lots of questions that we have to answer,” he stated during a press briefing. The sheriff’s comments underscored the complexity of the situation, with officials keen on uncovering the motive behind the explosion.

FBI Special Agent in Charge Jeremy Schwartz confirmed that authorities have not yet determined whether the incident was an act of terrorism. However, the timing of the explosion raised concerns in the wake of other recent violent events, including a tragic attack just hours earlier in New Orleans. In that incident, a truck was driven into a crowd of New Year’s Day celebrants, resulting in the deaths of 15 people. With multiple high-profile events surrounding the incident, the investigation into the Las Vegas explosion is expected to continue with heightened scrutiny.