Billionaire entrepreneur Elon Musk has asked a U.S. federal judge to dismiss a lawsuit filed by the Securities and Exchange Commission (SEC) that accuses him of failing to promptly disclose his significant stake in Twitter, now X, back in 2022.
In a court filing made public Thursday, Musk’s legal team argued that the SEC’s complaint over the delayed disclosure of his 9.2% stake in the social media platform was without merit. The attorneys claim the regulator’s case is based on a “misguided interpretation” of disclosure rules and unjustly targets Musk for what they describe as a harmless delay.
The SEC lawsuit, filed in April 2024, alleges that Musk violated federal securities laws by waiting 11 days after surpassing the 5% ownership threshold to inform the market well beyond the 10 day requirement set by law. The delay, regulators argue, may have allowed Musk to acquire additional shares at lower prices, potentially misleading investors and giving him an unfair advantage.
Musk ultimately disclosed his stake in April 2022, triggering a sharp rise in Twitter’s stock. Soon after, he launched a $44 billion takeover bid for the company, which he later completed and subsequently rebranded as X.
Musk’s defense asserts that the SEC has failed to show any material harm resulting from the timing of the disclosure. His lawyers also contend the lawsuit is part of a broader pattern of overreach by the regulator, with whom Musk has had a long and contentious history.
The Tesla and SpaceX CEO has clashed with the SEC multiple times, most notably over his 2018 tweet claiming he had “funding secured” to take Tesla private an incident that led to a settlement involving oversight of his social media posts.
The federal judge overseeing the case has not yet ruled on the motion to dismiss. If the case proceeds, it could add another chapter to the ongoing legal battles between Musk and the SEC, further testing the limits of regulatory authority over high-profile executives in the digital age.
source: reuters.com