Washington: The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against billionaire Elon Musk, accusing him of failing to disclose his ownership of Twitter stock in a timely manner in early 2022, before his eventual acquisition of the social media platform.

Allegations of undisclosed ownership and financial impact
The SEC alleges that Musk's delay in revealing his ownership of more than 5% of Twitter allowed him to underpay by at least $150 million for shares he bought later on. Musk’s purchase of Twitter, now rebranded as X, was finalised in October 2022.

Timeline of events
Musk began acquiring Twitter shares in early 2022, crossing the 5% ownership threshold by March of that year. According to the SEC's complaint, Musk was legally required to disclose this ownership but failed to do so until April 4, 2022—11 days after the deadline.

Musk's legal defence
Musk’s lawyer, Alex Spiro, dismissed the lawsuit, claiming that the SEC was unable to bring forth a substantial case. "This is an admission by the SEC that they cannot bring an actual case," Spiro said. He labelled the lawsuit as a “sham,” adding, “the SEC’s multi-year campaign of harassment against Mr. Musk culminated in the filing of a single-count ticky tack complaint... an offence that, even if proven, carries a nominal penalty.”

SEC investigation and legal action
Following Musk’s agreement to acquire Twitter in April 2022, he attempted to back out, prompting Twitter to sue him to enforce the purchase. The SEC began investigating Musk’s stock purchases and his related statements and filings in April 2022.

Before filing the lawsuit, the SEC also sought to compel Musk’s testimony in connection with its investigation into his Twitter stock dealings.

Future uncertainty
The SEC's current chair, Gary Gensler, is scheduled to step down from his position on January 20, and it remains unclear whether the incoming administration will continue with the lawsuit.

With AP inputs