Elon Musk settles SEC lawsuit over Twitter disclosures

Elon Musk settled the U.S. ​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 Musk's name will pay a $1.5 million civil penalty, without admitting wrongdoing. Musk won't have to give up any money he allegedly saved from the delay.

The settlement was disclosed on Monday in the Washington, D.C., federal court.

In its January 2025 lawsuit, the SEC said Musk's 11-day delay in revealing his initial ​5% Twitter stake in late March and early April 2022 let him buy more than $500 million of shares at artificially low prices, ​before he finally revealed a 9.2% stake.

The SEC had argued that Musk should pay a civil fine and repay the $150 ⁠million he allegedly saved at the expense of unsuspecting investors.

Musk called the delay inadvertent, and accused the SEC of violating his free speech rights by targeting ​him.

"Mr. Musk has now been cleared of all issues related to the late filing of forms in the Twitter acquisition, as we said from the ​outset he would be," his lawyer Alex Spiro said in a statement.

Musk completed the $44 billion Twitter purchase in October 2022. He eventually folded Twitter into his artificial intelligence company xAI, and later folded xAI into his rocket company SpaceX. Forbes magazine says Musk is worth $789.9 billion.

SETTLEMENT FOLLOWS SEC ENFORCEMENT CHIEF'S DEPARTURE

The SEC sued Musk six days before former U.S. ​President Joe Biden left the White House and was replaced by Donald Trump.
Current SEC Chairman Paul Atkins has been refocusing the regulator's enforcement priorities.

Both sides ​had disclosed on March 17 they were in talks to settle, one day after SEC enforcement chief Margaret Ryan abruptly left her job after just over six months.

Ryan's departure ‌followed clashes with ⁠other leaders at the agency over enforcement, people familiar with the matter have said.

The SEC did not immediately respond to a request for comment over the settlement. A lawyer for Ryan did not immediately respond to a similar request.

LARGEST PENALTY OF ITS TYPE

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 $150 million may have been tough to ​prove in court, people familiar with ​the settlement said.

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 (TSLA.O), opens new tab private.

He settled that case by paying ​a $20 million civil fine, letting Tesla lawyers review some Twitter posts in advance, and giving up his role ​as Tesla's chairman.

Monday's settlement ⁠came three months after U.S. District Judge Sparkle Sooknanan rejected Musk's bid to dismiss the case.

JURY FOUND MUSK LIABLE OVER TWITTER

The case is separate from a civil lawsuit where a San Francisco jury held Musk liable on March 20 for having defrauded Twitter shareholders after announcing the buyout.

Shareholders alleged that Musk questioned whether Twitter was overrun ⁠by fake ​and spam accounts, known as bots, in an effort to force Twitter to renegotiate the ​takeover price or let him back out.

The shareholders said Musk's comments caused Twitter's stock price to fall, and that they suffered losses by selling shares at depressed prices.

Musk is trying to overturn ​that verdict or get a new trial.

- Reuters