WASHINGTON/NEW YORK – Elon Musk settled the US Securities and Exchange Commission’s civil lawsuit accusing the world’s richest person of waiting too long in 2022 to disclose his initial purchases of Twitter, now known as X.
A trust in Mr Musk’s name will pay a US$1.5 million (S$1.9 million) civil penalty, without admitting wrongdoing. Mr Musk won’t have to give up any money he allegedly saved from the delay.
The settlement was disclosed on May 4 in the Washington DC federal court. Lawyers for Mr Musk did not immediately respond to requests for comment.
In its January 2025 lawsuit, the SEC said Mr Musk’s 11-day delay in revealing his initial 5 per cent Twitter stake in late March and early April 2022 let him buy more than US$500 million of shares at artificially low prices.
The SEC had argued that Mr Musk should pay a civil fine and repay the US$150 million he allegedly saved at the expense of unsuspecting investors. Mr Musk called the delay inadvertent, and accused the SEC of violating his free speech rights by targeting him.
He completed the US$44 billion Twitter purchase in October 2022.
Mr Musk’s civil penalty is the largest in SEC history for the type of violation he was accused of, a person familiar with the settlement said.
The SEC’s effort to recoup the US$150 million may have been tough to prove in court, people familiar with the settlement said.
Mr Musk has had a fraught relationship with the SEC, starting in September 2018 when the regulator charged him with securities fraud for saying on Twitter he had “secured” funding to potentially take his electric car company Tesla private.
He settled that case by paying a US$20 million civil fine, letting Tesla lawyers review some Twitter posts in advance, and giving up his role as Tesla’s chairman.
The settlement on May 4 came three months after US District Judge Sparkle Sooknanan rejected Mr Musk’s bid to dismiss the case. Both sides disclosed on March 17 they were in talks to settle.
The SEC sued Mr Musk six days before former US president Joe Biden left the White House and was replaced by Mr Donald Trump. Current SEC Chairman Paul Atkins has been refocusing the regulator’s enforcement priorities. REUTERS
