The US markets watchdog has filed a lawsuit against Elon Musk alleging 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 multi-billionaire Tesla boss saved $150m (£123m) in share purchases as a result.
According to SEC rules, investors whose holdings surpass 5% have 10 days to report that they have crossed that threshold. Musk did so 21 days after the purchase, the filing says.
In a post on the social media platform, Musk called the SEC a “totally broken organisation.”
He also accused the regulator of wasting its time when “there are so many actual crimes that go unpunished.”
“Musk’s violation resulted in substantial economic harm to investors,” the SEC complaint said.
In a statement emailed to BBC News, Musk’s lawyer, Alex Spiro, described the lawsuit as a “sham” and “a campaign of harassment” against his client.
Twitter’s share price rose by more than 27% after Musk made his share purchase public on 4 April 2022, the SEC said.
Musk ended up buying Twitter for $44bn in October 2022 and has since changed the platform’s name to X.
The complaint was submitted by the SEC to a federal court in Washington DC on Tuesday.
The lawsuit also asked the court to order Musk to give up “unjust” profits and pay a fine.
