Elon Musk has claimed that the U.S. Securities and Exchange Commission (SEC) is pressuring him to pay a penalty or face legal action over alleged failures in disclosing his purchases of Twitter stock prior to acquiring the platform in 2022.
In a letter shared on X (formerly Twitter), Musk’s lawyer, Alex Spiro, criticized the SEC’s actions as a “misguided scheme” aimed at intimidating Musk. Spiro also claimed that the SEC had reopened an investigation into Neuralink, Musk’s brain-computer interface company.
The SEC declined to comment on the letter or confirm the allegations. “It is the policy of the SEC to conduct investigations on a confidential basis to preserve the integrity of its investigative process,” a spokesperson stated in an email.
The controversy centers around a lawsuit filed by a Twitter investor in April 2022, accusing Musk of delaying the disclosure of his growing stake in Twitter. The lawsuit alleges Musk failed to disclose when he passed the 5% ownership threshold, as required by regulations, and waited until his stake exceeded 9% to make his position public.
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This delay, according to the lawsuit, harmed ordinary investors who sold shares before Musk’s stake was disclosed, missing out on significant gains when the news caused Twitter’s stock to surge by 27% in early April 2022.
Musk’s contentious relationship with the SEC dates back to 2018, when he and Tesla each paid $20 million in fines after Musk tweeted about plans to take Tesla private, which never materialized. Musk later challenged a settlement requirement to have Tesla-related posts pre-approved by a company lawyer, arguing it infringed on his free speech rights. The U.S. Supreme Court rejected his appeal without comment.
Adding to the drama, SEC Chairman Gary Gensler, appointed by President Joe Biden, is set to step down in January 2025, with former President Donald Trump announcing his intent to nominate cryptocurrency advocate Paul Atkins as the next chair. Trump also named Musk as co-chair of a new “Department of Government Efficiency” aimed at overhauling federal operations.
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