Billionaire Elon Musk filed a motion on Thursday to dismiss the Securities and Exchange Commission's civil lawsuit accusing him of failing to disclose his Twitter Inc.—now rebranded as X—stake within required timeframes in 2022.
SEC Alleges $500 Million in Artificially Low Purchases
The SEC complaint, filed in Washington D.C. federal court in January, claims Musk violated securities law by waiting 11 days beyond the required disclosure deadline after crossing the 5% ownership threshold in Twitter stock, Reuters reported.
Federal rules require investors to disclose within 10 calendar days when crossing this threshold, which would have been March 24, 2022, for Musk.
The agency alleges Musk purchased over $500 million in additional Twitter shares at artificially low prices before disclosing his 9.2% stake on April 4, 2022. The SEC seeks civil fines and disgorgement of profits from the alleged violations.
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Musk’s Legal Defense Claims No Intent
Musk’s attorneys argue the Tesla Inc. (NASDAQ:TSLA) and SpaceX CEO stopped purchasing shares and filed disclosure one business day after his wealth manager consulted securities counsel about filing requirements.
“The SEC does not allege that Mr. Musk acted intentionally, deliberately, willfully, or even recklessly,” his lawyers stated. They characterized the case as targeting Musk “for his protected criticism of government overreach.”
The defense contends Musk “fully corrected any alleged error immediately upon its discovery” with no ongoing violation, according to the report.
Historical SEC Disputes and Market Context
This lawsuit represents the latest in ongoing disputes between Musk and the SEC. The agency previously sued Musk in 2018 over Twitter posts about taking Tesla private with “funding secured.”
The current case was filed on January 14, six days before President Donald Trump‘s inauguration, who later appointed Musk as special adviser for government efficiency initiatives.
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