SEC sues Elon Musk over purchase of 'artificially low' Twitter shares: report
Elon Musk has been sued by federal regulators, who say he violated securities law by failing to properly disclose his purchase of Twitter shares, which they allege were bought at "artificially low prices," according to a report.
The Securities and Exchange Commission, or SEC, sued the MAGA tech billionaire Tuesday, CNBC reported.
Regulators flagged his 2022 purchase of shares of the social media platform Twitter. The SEC said he committed securities fraud by failing to disclose his ownership in the company and buying shares at "artificially low prices," according to the report.
Musk famously bought the platform in October 2022 for $44 billion — rebranding it to X — in a deal he initially tried to back out on. Recent estimates by Fidelity show X is valued at about $9.4 billion, a significant decrease of nearly 80 percent over its purchase price.
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Authorities said in their complaint that Musk failed to disclose he had built up a position in his company greater than 5%, which he would've needed to tell the public, “allowing him to underpay by at least $150 million for shares he purchased after his financial beneficial ownership report was due.”
Musk helped propel President-elect Donald Trump back to the White House last year, spending about $250 million to help elect Trump.
Trump has nominated Paul Atkins, a former SEC commissioner during the George W. Bush administration, to replace current SEC Chair Gary Gensler, who said he would step down on Jan. 20.
The news comes amid a report that Musk has been floated to buy rival social media company TikTok US. TikTok on Tuesday called the report "pure fiction."
