SEC Reportedly Investigates Musk For Delay In Disclosing 5% Twitter Stake
Topline
Following Elon Musk’s delay in reporting his huge stake in Twitter, which could have cost him thousands of dollars, The Securities and Exchange Commission opened an investigation. Wall Street Journal reported Wednesday — as Musk seeks to purchase Twitter.
Elon Musk attended the 2022 Met Gala at The Metropolitan Museum of Art, May 2.
The Key Facts
The JournalThe news about the SEC investigation was reported by unnamed sources familiar with the matter.
Musk acquired a 5% stake in Twitter by March 14, but did not report it to the SEC until April 4, missing the regulatory agency’s 10-day disclosure deadline by more than a week.
After reaching 5% ownership, Musk continued to buy Twitter stock at relatively low prices before publicly disclosing his eventual 9.2% stake in the company in an SEC filing, after which the company’s share price leapt about 27% to $ 49.97 in one day.
Musk may have saved more than 143million by keeping his disclosure secret. But, Daniel Taylor, University of Pennsylvania accountant, said that it remains to see if the SEC will file civil charges against Musk. Journal.
A Twitter shareholder filed suit against Musk last month over the reporting issue. He claimed that Musk had cheated stockholders who bought shares between the time he acquired 5% and the time he submitted a disclosure form to the SEC.
The SEC declined to comment on reports of a probe. SMEMusk representative did not respond immediately to my request for comment.
The Key Background
Musk currently owns a 9.2% stake in Twitter, and the company’s board accepted Musk’s offer to buy Twitter outright for 44 billion through a combination of debt and equity. The current reported SEC investigation would not be Musk’s first brush with the agency. In 2018, Musk tweeted that he had secured funding to take Tesla private at $ 420 per share, causing the company’s stock price to rise. SEC began an inquiry into whether Musk’s tweets are true. After Musk admitted that a proposal to take Tesla private wasn’t secure, the SEC settled with him to allow a Tesla attorney to examine his tweets. Last month, Judge Lewis Liman rejected Musk’s request to have the settlement thrown out. SEC also has Musk under investigation for a November Tweet in which Musk polled his Twitter followers to determine whether or not he should be selling 10% of Tesla stock. The terms of the settlement state that Liman claimed the tweet was not approved by a Tesla attorney.
Big Number
224.5 billion. That’s how much SME Musk estimates is worth, making him the richest person in the world. However, Musk’s net worth has declined by $ 31.4 billion since last Friday, as Tesla’s market capitalization fell by 15%.
Additional Reading
Twitter Shareholder Sues Musk, Saying He Misled Investors (SME)
