πΉ MARKET WATCH: SEC and Elon Musk agree to settle lawsuit over Twitter buyout in 2022
The Securities and Exchange Commission agreed to settle a lawsuit it filed against Elon Musk last year that accused the world’s wealthiest person of violating securities law in the run-up to his purchase of Twitter. Filings on Monday, signed by attorneys representing the SEC and Musk, said that Musk’s revocable trust would pay a civil penalty of $1.5 million to the commission as part of the settlement.
The settlement still needs sign-off by the judge presiding over the case. Alex Spiro, an attorney for Musk, said the result vindicated his client, writing in a statement that, “A trust vehicle has agreed to a small fine for being late on one filing.” The SEC didn’t immediately respond to a request for comment.
Musk, who is CEO of Tesla and SpaceX, purchased Twitter for $44 billion in a leveraged buyout in late 2022. Musk later changed the name to X before merging it with his artificial intelligence company, xAI, and then with SpaceX earlier this year. According to Forbes, Musk has a net worth of roughly $790 billion.
Prior to his purchase of Twitter, Musk built up a position of greater than 5% in the company, which was publicly traded. At that level, Musk was required to disclose his holdings to the public within 10 calendar days of reaching the 5% threshold. However, Musk was late in filing the disclosure. The SEC said in its initial complaint that Musk’s failure to disclose his stake allowed him to buy shares at “artificially low prices,” putting other investors at a disadvantage.
In a court filing last month, the SEC revealed that it was “engaged in discussions of a potential resolution” with Musk on the matter. In a separate class action trial, a jury in a federal court in California found in March that Musk had misled Twitter investors in the runup to his Twitter buyout. Musk’s attorneys said after that verdict that they planned to appeal. The agreement disclosed on Monday follows a prior settlement between the regulator and Musk in 2018 involving Tesla and the CEO’s aborted efforts to take the automaker public. Musk and Tesla each had to pay $20 million in fines, and Musk had to temporarily relinquish his role as chairman of the company’s board. A revised consent decree was signed the following year.
Following that agreement, Musk repeatedly said he doesn’t respect the SEC. Meanwhile, Musk is currently embroiled in a separate legal action with OpenAI CEO Sam Altman. The trial — Musk v. Altman — began last week in a federal courthouse in Oakland, California, with Musk taking the stand from Tuesday through Thursday. In 2024, Musk sued Altman and OpenAI, alleging they reneged on their promise to keep the artificial intelligence lab as a nonprofit.
WATCH: Musk fires back at OpenAI attorney
Read More at National News Media Network
For continuing coverage of National News, U.S. Treasury, Iran, Economic Sanctions, National Security, and Foreign Policy, visit National News Media Network:
https://nationalnewsmedianetwork.com/
Read National News Correspondent Chauncey I. Brown III's original reporting and analysis as major developments in U.S. sanctions policy, national security, and international affairs continue to unfold.
Chauncey I. Brown III
National News Correspondent
National News Media Network
AI Disclosure: The featured image accompanying this article was created using artificial intelligence for illustrative purposes. The editorial content, reporting, and analysis are original work by Chauncey I. Brown III and published by National News Media Network.
Tags: National News, U.S. Treasury, Iran, Economic Sanctions, National Security, Foreign Policy, Weapons Procurement, Treasury Department, National News Media Network, Chauncey I. Brown III
Comments
Post a Comment