Elon Musk Sued in US For Not Disclosing Massive Stake in Twitter Before Buying Platform

New York: Elon Musk, the owner of the social media giant ‘X’ (formerly known as Twitter), is in trouble after he has been sued by the United States for non-disclosure of his Twitter ownership at the time of buying the platform. This comes amid reports of China exploring options of selling US TikTok operations to Elon Musk. 

US Sues Elon Musk for Non-Disclosure of Twitter Ownership At the Time of Buying

The US Securities and Exchange Commission has sued billionaire Elon Musk, saying he failed to disclose his ownership of Twitter stock in a timely manner in early 2022, before buying the social media site.

As a result, the SEC alleges, Musk was able to underpay "by at least USD 150 million" for shares he bought after he should have disclosed his ownership of more than 5 per cent of Twitter's shares. Musk bought Twitter in October 2022 and later renamed it X.

Musk started amassing Twitter shares in early 2022, and by March of that year, he owned more than 5 per cent. At this point, the complaint says, he was required by law to disclose his ownership but he failed to do so until April 4, 11 days after the report was due.

Representatives for X and Musk did not immediately return a message for comment.

After Musk signed a deal to acquire Twitter in April 2022, he tried to back out of it, leading the company to sue him to force him to go through with the acquisition.

The has SEC said that starting in April 2022, it authorised an investigation into whether any securities laws were broken in connection with Musk's purchases of Twitter stock and his statements and SEC filings related to the company.

Before it filed the lawsuit, the SEC went to court in an attempt to compel Musk to testify as part of an investigation into his purchase of Twitter.

The SEC's current chair, Gary Gensler, plans to step down from his post on January 20 and it is not clear if the new administration will continue the lawsuit. 

(Inputs from AP)