Washington: Just days before Donald Trump’s inauguration as the 47th US President, the Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging securities violations related to his 2022 acquisition of Twitter, now known as X.
The SEC claims Musk failed to disclose his 5% stake in Twitter promptly, violating federal securities laws. The complaint, filed in federal court in Washington, DC, further alleges that the tech billionaire waited to disclose his acquisition to build a larger position in Twitter at a discounted price.
The lawsuit comes as Gary Gensler, Chairman of the SEC, prepares to step down on January 20, the same day Trump takes office.
According to the SEC’s complaint, Musk acquired more than 5% of Twitter on March 24, 2022, but did not file the required beneficial ownership report until April 4, 2022. During this period of delayed disclosure, Musk allegedly increased his stake from 5% to 9%, the SEC claims.
Musk’s legal team has dismissed the SEC’s lawsuit, arguing that it is a baseless case. In a statement, Musk’s lawyers accused the SEC of pursuing a years-long campaign of harassment, culminating in the filing of a “single-count” complaint.
As Trump prepares for office, he has nominated Paul Atkins, a former SEC Commissioner, to replace Gensler as SEC Chairman. Atkins, who is seen as a Trump ally, is expected to take over the role after Gensler’s departure.
Musk, who bought Twitter for $44 billion in October 2022, continues to face legal and regulatory challenges related to his business dealings.
With IANS inputs