Elon Musk Violated Securities Law In Twitter Buy-Up, Earning Additional $156 millionImage via Britta Pedersen-Pool/Getty Images Tech News Elon Musk
Billionaire edgelord Elon Musk is now Twitter’s largest shareholder and newest board member after buying 9.2% of the social media company’s stock over the last few months, but it appears that the public face of Tesla once again ran afoul of the U.S. Securities and Exchange Commission.
According to The Washington Post, Musk’s disclosure of his 9.2% stake in the social media platform violated a law that requires investors to disclose when their holdings in a company surpass 5%. Musk hit that mark on March 14, three weeks before he disclosed his purchase publicly.
By keeping his stake in Twitter secret during those additional three weeks, experts believe he made an additional $156 million thanks to the approximately 30% jump in value Twitter’s share price enjoyed following his disclosure on April 4.
“I really don’t know what’s going through his mind,” University of Maryland business school professor David Kass told The Washington Post. “Was he ignorant or knowledgeable that he was violating securities law?”
This is the latest in what feels like an unending feud between the SpaceX head and the SEC. Musk paid a $20 million fine for allegedly misleading investors in Tesla after tweeting that he raised enough funds to take Tesla private at the price of $420 a share. He also drew attention in 2021 from the SEC when he floated the idea of selling 10% of his stake in Tesla via a Twitter poll. The regulatory body is currently investigating a stock sale made one day before that tweet by Musk’s brother, per a report from The Wall Street Journal.
More recently, Musk’s sparring with the SEC has turned even more sophomoric. In a court filing last month, Musk’s lawyers used a line from Eminem’s track Without Me as part of an effort to end a consent agreement related to the 2018 tweet. That agreement requires Musk’s lawyers to vet his tweets prior to them being posted.
Musk also recently accused the SEC of leaking information from the investigation into his securities fraud, positioning it as retaliation against his derisive comments toward the agency. The court filing alleging such didn’t include any evidence to support the claim.
Musk also may have used his Twitter account to potentially influence the market as he was purchasing shares in Twitter. He teased the need for a new social media platform via Twitter after lodging complaints that Twitter limits free speech on its platform. According to SEC filings, Musk bought just under 3.5 million shares of Twitter stock the day before releasing that tweet.
While the rest of Musk’s various sagas with the SEC play out, it appears that this latest infraction will likely result in another fine if the agency launches a probe into Musk’s activity.