Big blow to Elon Musk, US SEC sues world's richest person for allegedly failing to disclose...

The US Securities and Exchange Commission (SEC) filed a lawsuit on Tuesday against billionaire Elon Musk, accusing him of violating federal securities law by delaying the disclosure of his stake in Twitter in 2022.

The SEC claims Musk waited 11 days too long to reveal his ownership of more than 5% of Twitter’s shares, a violation of rules requiring disclosure within 10 calendar days. According to the SEC, Musk should have disclosed his stake by March 24, 2022, but waited until April 4, when his ownership had grown to 9.2%.

The delay allegedly allowed Musk to buy over $500 million in Twitter shares at lower prices, harming other investors. Twitter’s stock price rose by more than 27% after Musk’s disclosure.

The SEC’s lawsuit seeks civil penalties and the recovery of profits Musk is accused of gaining unfairly.

Musk, who eventually bought Twitter for $44 billion in October 2022 and renamed it X, has denied wrongdoing. His lawyer, Alex Spiro, called the lawsuit part of the SEC’s “campaign of harassment” and dismissed the claims as an “administrative failure” with a minor penalty.

This is not Musk’s first clash with the SEC. In 2018, he faced similar allegations over tweets about taking Tesla private, resulting in a $20 million fine and stricter oversight of his social media activity.

Musk has also been sued by former Twitter shareholders over the late disclosure. He insists the delay was unintentional.

The case, filed in Washington, DC, adds to Musk’s legal troubles as the world’s richest person, with a net worth of $417 billion, continues to face intense regulatory scrutiny.