Musk Settles to Pay $1.5 Million Over Twitter Share Purchase Dispute
Washington: Elon Musk agreed Monday to pay a small sum to settle a government lawsuit accusing him of violating stock market rules when he secretly bought Twitter shares before buying the social media platform for $44 billion in 2022.
Musk’s foundation will pay a $1.5 million fine as part of the settlement, which was filed in Washington federal court and still needs a judge’s approval.
The case involves Musk missing a legal deadline to notify regulators because he bought more and more Twitter shares before the acquisition.
Musk’s lawyer, Alex Spiro, evaluated the result as proof of vindication, saying that his client “as we have said from the beginning, is now cleared of all issues related to late filling out of forms in the Twitter acquisition.”
“A trust broker accepted a small fine for being late with an application,” Spiro said.
In an email to AFP, Spiro added that the deal with the US government was not a solution “because it has done nothing wrong.”
“The case against him was dismissed,” Spiro said.
The case focused on a simple rule: When an investor buys more than five percent of a publicly traded company, he is required by law to disclose that stake within 10 days.
The Securities and Exchange Commission, the federal agency that oversees financial markets, said in January 2025 that Musk exceeded that deadline by 11 days when establishing his position on Twitter in early 2022.
The SEC said Musk’s delay allowed him to continue buying at favorable prices, saving an estimated $150 million at the expense of other shareholders who sold without knowing what was going on.
Despite these allegations, the settlement with the SEC does not require Musk to repay any of these savings.
Without admitting any wrongdoing, the person he trusted only accepted a $1.5 million fine and a promise not to violate the same rule again.
The SEC said it amended its complaint to increase Musk’s credibility as a defendant and also filed the proposed settlement. If the judge approves, the agency said it would personally remove Musk from the case and end the case altogether.
The lawsuit was first filed a few days before then-President Joe Biden left office.
Musk, then a close ally of President Donald Trump, tried to have that proposal rejected, but a federal judge rejected that effort in February.
The sentence comes on the heels of a separate trial in California in March, where a jury found Musk misled Twitter investors with misleading posts during the chaotic 2022 takeover.
Damages in this case could reach nearly $2 billion, although Musk’s lawyers say they plan to appeal.
This is Musk’s second settlement with the SEC.
In 2018, he paid $20 million and gave up his chairmanship of Tesla after claiming on social media that he had the funds to take the electric car maker private; It was a deal that never materialized.
