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The US markets watchdog has filed a lawsuit against Elon Musk, alleging that he failed to disclose that he had amassed a stake in Twitter, allowing him to buy shares at “artificially low prices”.
The Securities and Exchange Commission (SEC) lawsuit alleges that the billionaire Tesla boss saved $150m (£123m) in share buybacks as a result.
According to SEC rules, investors whose holdings exceed 5% have 10 days to report that they have exceeded this threshold. Musk made the purchase 21 days after it was made, the filing says.
In a social media postMusk called the SEC “a completely broken organization.”
He also accused the regulator of wasting time, “when there are many real crimes that go unpunished”.
“Musk’s breach caused significant financial damage to investors.” the SEC complaint said.
In an emailed statement to BBC News, Musk’s lawyer, Alex Spiro, described the lawsuit as “false” and a “bullying campaign” against his client.
Twitter’s stock price rose more than 27% after Musk made his share purchase public on April 4, 2022, the SEC said.
Musk bought Twitter in October 2022 for $44 billion and has since changed the name of the platform to X.
The complaint was filed by the SEC in federal court in Washington, DC on tuesday
The lawsuit also asked the judge to disgorge Musk from the “unfair” profits and pay a fine.
SEC Chairman Gary Gensler announced in November that he would step down when Donald Trump returns to the White House on January 20.
That was after Trump said he planned to fire Mr. Gensler on “day one” of his new administration.
Under Mr. Gensler’s leadership, the SEC clashed with Musk, who is a close ally of the president-elect.
But Mr. Musk had run-ins with the SEC long before Mr. Gensler took over.
In 2018, the regulator accused Musk of defrauding Tesla investors by claiming he had “guaranteed financing” to take the electric car company he runs private.
He later consolidated his positions, stepping down as chairman of the company’s board and agreeing to accept what he called a Twitter employee, limiting what he could write about the company on social media.
