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Interim SEC Chief Casts Sole Vote Against Suing Musk Over Late Twitter Disclosure

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In January, just before Republicans took control of the U.S. Securities and Exchange Commission (SEC), the agency held a closed-door vote on whether to sue Elon Musk for securities law violations related to his late disclosure of purchasing shares in Twitter (now X). According to sources familiar with the vote, four of the five commissioners, including Republican Hester Peirce, voted in favor of suing Musk, while the acting SEC chief, Republican Mark Uyeda, cast the lone dissenting vote.

This vote occurred just days before the SEC filed a lawsuit against Musk on January 14, alleging that he had violated disclosure rules by failing to report his purchase of more than 5% of Twitter’s shares within the required 10-day window. Musk’s late disclosure, which came 21 days after the purchase, allegedly allowed him to acquire more shares at a lower price, saving $150 million on his eventual acquisition of the company.

Uyeda reportedly expressed concerns over the penalty Musk faced and pressed SEC enforcement staff to confirm that politics were not influencing the case, asking them to sign pledges to that effect, which the staff refused. Despite Uyeda’s concerns, Peirce joined the three Democratic commissioners in voting to proceed with the lawsuit.

The SEC’s investigation into Musk, which began in 2022, focused not only on the timing of his disclosure but also whether he had acted with any intent to manipulate the stock price. Musk has maintained that the delay was due to a misunderstanding of the SEC’s rules. The SEC ultimately did not pursue charges alleging intent.

The delay in bringing the case has raised questions among legal experts, who have questioned why the SEC waited so long to act, particularly given the politically charged nature of the case. Musk has had a longstanding feud with the SEC, dating back to 2018 when the agency sued him for misleading investors in a tweet about taking Tesla private.

Musk has until April 4 to respond to the SEC’s summons in this case.

Elon Musk Issued Summons in SEC Case Over Twitter Stake Disclosure

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Elon Musk, the world’s richest man and a prominent adviser to former U.S. President Donald Trump, has been issued a summons in connection with the Securities and Exchange Commission (SEC) lawsuit against him. The summons and other legal documents were served on March 14 to a security guard at the Brownsville, Texas, headquarters of Musk’s company, SpaceX, according to a court filing on Thursday.

The SEC lawsuit, filed in January, accuses Musk of delaying the disclosure of his substantial stake in Twitter in 2022. The regulator claims Musk violated federal securities law by waiting 11 days past the required deadline to disclose his initial 5% purchase of Twitter’s common shares. Under SEC rules, investors are required to disclose any ownership stake that exceeds 5% within 10 calendar days, which in Musk’s case should have been by March 24, 2022.

Musk and his legal team have not yet responded to requests for comment, and a spokesperson for the SEC declined to provide additional details.

X (Formerly Twitter) Sues Indian Government Over Expanded Censorship Powers

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In a new escalation of its legal dispute with India’s government, X, the social media platform formerly known as Twitter, has filed a lawsuit against the Indian Ministry of Information Technology (IT). The platform argues that the government’s expansion of censorship powers has unlawfully facilitated easier content removal, giving “countless” officials the authority to block online content without adequate legal safeguards.

The lawsuit, filed on March 5, claims that the Indian government has launched a new website through the Ministry of Home Affairs that allows government departments to issue content-blocking orders without stringent oversight. X argues that this mechanism bypasses the legal protections previously in place, which required content removal orders to be made only in cases of harm to national sovereignty or public order and were subject to the scrutiny of senior officials.

X’s legal team contends that the new website has created an “impermissible parallel mechanism” for censorship, allowing for “unrestrained censorship of information” within India. The platform is seeking to have the directive quashed in court.

This filing is the latest chapter in the ongoing conflict between X and Prime Minister Narendra Modi’s administration. In 2021, the platform was involved in a standoff with the Indian government over its refusal to comply with orders to block tweets related to a farmers’ protest against government policies. Though X eventually complied with these requests after facing public criticism, the legal challenge surrounding these decisions continues.

The case was briefly heard by a judge in the High Court of Karnataka state earlier this week, but no final ruling was made. The court is scheduled to hear the case again on March 27.