Elon Musk has settled a long-running dispute with the U.S. Securities and Exchange Commission over his late disclosure of Twitter share ownership, ending that part of the case without any admission of wrongdoing. Under the agreement, Musk will pay a civil penalty of $1.5 million, while the SEC drops its push for him to hand over alleged profits tied to the delay.
The deal closes a closely watched enforcement fight centered on whether Musk waited too long to report that he had crossed the 5 percent ownership threshold in Twitter. Regulators said the delay gave him more time to keep buying shares before the market fully understood the scale of his stake.
What the SEC alleged
The case focused on Musk’s stock purchases in late March and early April 2022. According to the SEC, he was 11 days late in disclosing that he had accumulated more than 5 percent of Twitter, and his stake later rose to 9.2 percent.
That timing mattered because the market did not yet know how aggressively he was building his position. The SEC argued that the undisclosed accumulation may have allowed him to continue buying at lower prices, with potential gains it once estimated at more than $500 million.
What the settlement leaves out
The final settlement does not include the SEC’s earlier demand that Musk return about $150 million, which the agency had treated as ill-gotten profit. That claim is no longer part of the agreement reached by both sides.
Musk has denied that the reporting delay was intentional. He has said the filing was not meant to manipulate the market, and he has also accused the SEC of unfairly targeting him and violating his free speech rights.
His lawyer, Alex Spiro, said Musk is now free from all issues connected to the delayed reporting tied to the Twitter acquisition.
Why the penalty stands out
The $1.5 million civil fine is described as the largest in SEC history for this type of late-reporting violation. Even though the amount is small relative to Musk’s wealth, it still marks a notable enforcement action for a disclosure issue.
The SEC was also seen as facing an uphill battle if it tried to prove damages as high as 26 billion rupiah in court. That made a negotiated settlement a more practical outcome for both sides.
A case shaped by wider SEC changes
The timing of the agreement came as the SEC itself was going through internal change. The lawsuit was filed only days before the end of President Joe Biden’s term, before Donald Trump took office.
That shift appears to have influenced the agency’s direction. SEC Chair Paul Atkins has begun changing the enforcement focus, and the settlement talk happened shortly after Margaret Ryan, the SEC’s top enforcement official, abruptly stepped down.
A broader history of conflict
Musk’s relationship with the SEC has been tense for years. In 2018, he also resolved a separate case over comments about Tesla funding, paying a penalty and stepping down as chairman of the board.
This latest settlement does not end all legal pressure linked to Twitter. Musk still faces a separate lawsuit from Twitter shareholders alleging fraud, and a San Francisco jury has already found him responsible for investor losses in that matter.
That case centers on his remarks about the number of bot accounts on Twitter, which were said to affect the share price and leave investors at a loss when they sold. After the acquisition was completed in October 2022, Twitter later became part of a broader business structure under the artificial intelligence company xAI, before ending up under SpaceX.
Source: www.idntimes.com
