SEC and Elon Musk agree to settle lawsuit over Twitter buyout in 2022

The SEC has agreed to settle a lawsuit it filed last year against Elon Musk, accusing the world’s richest person of violating securities laws in his purchase of Twitter.

Applications The settlement, signed Monday by the SEC and lawyers representing Musk, said Musk’s revocable trust will pay a $1.5 million fine to the commission as part of the settlement. The judge has not yet approved the proposed settlement.

The SEC and Musk attorney Alex Spiro did not immediately respond to a request for comment.

Musk, the CEO of Tesla and SpaceX, acquired Twitter for $44 billion through a leveraged buyout in late 2022. Musk later changed the name to X, then merged it with his artificial intelligence company xAI and SpaceX earlier this year. Accordingly ForbesMusk’s net worth is approximately $790 billion.

Before purchasing Twitter, Musk had a position of over 5% in the publicly traded company. At that level, Musk was required to publicly disclose his holdings within 10 calendar days after reaching the 5% threshold. However, Musk was late in making the statement.

In its initial complaint, the SEC said Musk’s failure to disclose his holdings allowed him to buy shares at “artificially low prices” and put other investors at a disadvantage. In a court filing last month, the SEC said it was “engaging in discussions regarding a potential resolution” with Musk regarding the issue.

In a separate class action lawsuit, a jury in a federal court in California found in March that Musk misled Twitter investors ahead of his acquisition of Twitter. Musk’s lawyers said they planned to appeal after this decision.

The agreement announced Monday follows a previous agreement between the regulator and Musk in 2018. Tesla’s and the CEO’s efforts to take the automaker public were thwarted. Musk and Tesla each had to pay a fine of $20 million, and Musk had to temporarily give up his position as chairman of the company’s board of directors. A revised consent decree was signed the following year.

Following this deal, Musk repeatedly said that he did not respect the SEC.

Meanwhile, Musk is currently embroiled in a separate legal case with OpenAI CEO Sam Altman. Musk v. Altman’s trial began last week at the federal courthouse in Oakland, California, with Musk taking the stand from Tuesday to Thursday. In 2024, Musk sued Altman and OpenAI, alleging that they had broken promises to keep the AI ​​laboratory a non-profit organization.

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