Elon Musk says the Securities and Exchange Commission wants him to pay fines involving what he disclosed — or failed to disclose — about his purchase of Twitter stock before he bought the social media platform in 2022.
In a letter Musk posted on the platform, now called X, his lawyer Alex Spiro says the commission’s demand for a monetary payment to the outgoing SEC chairman, Gary Gensler, is a “corrupt scheme” not to intimidate Musk. The letter also alleges that the commission this week reopened an investigation into Musk’s computer-to-human brain interface company Neuralink.
The SEC has not released the letter. Nor would it comment or confirm whether it has issued such a demand to Musk.
“It is the SEC’s policy to conduct investigations on a confidential basis to protect the integrity of its investigative process,” an agency spokeswoman said in an email Friday.
Messages were also sent on Friday Associated Press Looking for a comment from Spiro.
In the letter, Spiro says he is responding to SEC staff members’ demands about a multi-year investigation into “certain purchases, sales and disclosures of Twitter shares.” Additionally, Spiro is demanding to know who directed the actions.
Musk bought Twitter in October 2022 for $44 billion. But a lawsuit filed by a Twitter investor in April 2022 accused Musk of violating a regulatory deadline to disclose that he had accumulated at least 5% of the shares. Instead, according to the complaint, Musk failed to disclose his position on Twitter until he had doubled his stake to more than 9%.
That strategy, the lawsuit alleges, hurt ordinary investors who sold shares of the San Francisco company in about two weeks before Musk admitted he had a large stake in Twitter.
Ultimately, Musk’s share disclosure on Twitter sent its share price up 27% from April 1 to nearly $50 at the close of business on April 4. That unreasonable delay, according to the lawsuit, deprived investors who sold it. Prior to Musk owning a stake in the company, the shares were publicly aware of the opportunity for significant gains.
Musk has been involved in an ongoing battle with the SEC since 2018. They each agreed to pay $20 million in fines after Musk tweeted that he and his electric car company, Tesla, had raised the funds needed to take Tesla private. Such a transition never happened; Tesla is a public company.
Musk sought to overturn the part of the agreement that required Tesla’s lawyer to review his postings about Tesla. That provision, he argued, violated his right to free speech. The dispute reached the Supreme Court, which rejected Musk’s appeal without comment.
Gensler, who was nominated by President Joe Biden to lead the SEC, announced last month that he will step down from his position on January 20, when Donald Trump is inaugurated as president. Trump has announced that he wants to nominate cryptocurrency advocate Paul Atkins to chair the SEC.
Trump has appointed Musk as co-chairman of the “Department of Government Efficiency” to try to reform the federal government.
Why should you buy our membership?
You want to be the smartest in the room.
You want access to our award-winning journalism.
You don’t want to be confused and misinformed.
Choose your subscription package