Elon Musk is facing a lawsuit from the U.S. Securities and Exchange Commission (SEC) for not disclosing his Twitter ownership in 2022. The SEC claims Musk’s delay allowed him to buy shares at lower prices, harming investors. The lawsuit comes as President Biden and SEC Chairman Gary Gensler near the end of their terms.
Musk began buying Twitter shares before his $44 billion acquisition deal, owning over 5% by mid-March 2022. He was required to inform the SEC within 10 days but did not disclose this until April 4, 2022. The SEC argues that this delay allowed Musk to underpay Twitter investors by over $150 million.
Musk’s lawyer, Alex Spiro, stated that Musk did nothing wrong and criticized the SEC for what he called a “harassment campaign.” He described the lawsuit as a minor issue, suggesting it was based on a single administrative failure.
By March 24, 2022, Musk’s stake had increased to over 7%. He bought nearly 3.5 million shares the following day and expressed interest in acquiring Twitter to its board. Musk joined Twitter’s board and disclosed his stake in early April, at which point he owned more than 9% of the company, leading to a 27% increase in Twitter’s stock price.
The lawsuit is one of the last actions taken by SEC Chair Gensler, who is stepping down soon. It remains uncertain whether the new SEC leadership will continue pursuing this case. Musk has had a contentious relationship with Gensler and has faced scrutiny from the SEC regarding his Twitter share purchases.
China may be OK with TikTok selling to Elon Musk
The Chinese government is reconsidering its stance on the sale of TikTok to avoid a potential ban in the United States. Initially, China opposed the idea of selling TikTok, but now it is reportedly open to the possibility of selling part of the app to Elon Musk’s company, X. This shift comes as discussions are ongoing about how TikTok’s US assets could be sold to an American buyer.
The urgency of these discussions is heightened by a new law that could lead to TikTok’s ban in the US, which is set to take effect soon. This law allows TikTok’s parent company, ByteDance, to sell the app to a US-based owner to prevent a ban. The Supreme Court recently indicated it would uphold this law due to national security concerns, despite TikTok’s claims that it infringes on free speech.
Previously, China’s commerce ministry expressed strong opposition to a forced sale of TikTok. However, the situation has changed, and other potential buyers have shown interest. Despite this, ByteDance has maintained that TikTok is not for sale, and both ByteDance and Musk’s representatives have not commented on the recent reports.
TikTok’s spokesperson dismissed the discussions as “pure fiction,” indicating that the company is not engaging in talks about a sale. This evolving scenario highlights the complexities of international business and regulatory challenges.
