Elon Musk was sued on Tuesday (Jan. 14, local time) by the US Securities and Exchange Commission (SEC), which accused the world's richest person of waiting too long to disclose in 2022 that he had amassed a large stake in Twitter, the social media company he later bought.
In a complaint filed in Washington, DC federal court, the SEC said Musk violated federal securities law by waiting 11 days too long to disclose his initial purchase of five percent of Twitter's common shares.
An SEC rule requires investors to disclose within 10 calendar days, or by March 24, 2022, in Musk's case, when they cross a five percent ownership threshold.
The SEC said that at the expense of unsuspecting investors, Musk instead bought more than US$500 million of Twitter shares at artificially low prices before finally revealing his purchases on April 4, 2022, by which time he owned a 9.2 percent stake.
Twitter's share price rose more than 27 percent following that disclosure, the SEC said.
Tuesday's lawsuit seeks to force Musk to pay a civil fine and disgorge profits he didn't deserve.
Musk eventually purchased Twitter for US$44 billion in October 2022 and renamed it X.
Musk has also been sued in Manhattan federal court by former Twitter shareholders over the late disclosure.
In that case, Musk has said it was implausible to believe he wanted to defraud other shareholders, and that "all indications" were that his delay was a mistake.
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