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DETROIT (AP) — Elon Musk claims that the Securities and Exchange Commission (SEC) is demanding he either pay a financial penalty or face charges regarding his disclosures related to his Twitter stock purchases prior to acquiring the social media platform in 2022.
In a letter shared on X, Musk’s attorney, Alex Spiro, describes the SEC’s actions as a “misguided scheme” that is unlikely to deter Musk. The letter further claims that the SEC has reopened an inquiry this week into Neuralink, Musk’s venture focused on brain-computer interfaces.
As of now, the SEC has not made the letter public nor commented on the veracity of Musk’s claims regarding any monetary demand.
“It is the policy of the SEC to conduct investigations on a confidential basis to preserve the integrity of its investigative process,” an agency spokesperson noted in an email.
The Associated Press also reached out for comments from Spiro but had not received a response by Friday.
In his correspondence, Spiro indicates that he is addressing inquiries from SEC personnel concerning a lengthy investigation into “certain purchases, sales and disclosures of Twitter shares.” He additionally demands clarification on who is directing this investigation.
Musk’s acquisition of Twitter transpired in October 2022 for $44 billion. However, a lawsuit from a Twitter investor filed in April 2022 alleged that Musk breached regulatory requirements by failing to promptly disclose that he had acquired a stake of at least 5%. According to the allegations, Musk did not make his position public until he had increased his stake to over 9%.
This alleged delay, as stated in the lawsuit, reportedly caused losses for regular investors who sold shares in the days leading up to Musk’s public disclosure of his significant stake in the company.
Once Musk’s stake in Twitter became known, the share price jumped by 27%, climbing from its close on April 1 to nearly $50 by April 4, revealing the potential benefits that investors who sold shares early missed out on due to the delay.
Musk’s relationship with the SEC has been contentious since 2018, when he and Tesla settled for $20 million each after Musk tweeted about securing funding to take Tesla private—a scenario that never materialized.
He has since sought to modify the settlement’s stipulation requiring that his communications regarding Tesla be reviewed by a Tesla attorney, which he argued infringed upon his free speech rights. This case reached the Supreme Court, which declined to hear Musk’s appeal.
Gensler, who was appointed to lead the SEC by President Biden, announced that he would resign from his position on January 20, coinciding with Donald Trump’s inauguration. Trump has expressed plans to nominate Paul Atkins, a pro-cryptocurrency figure, as the new SEC chair.
In a further development, Trump named Musk co-chair of a newly proposed “Department of Government Efficiency” aimed at reforming federal operations.
Source
finance.yahoo.com