Elon Musk Seeks Dismissal of SEC Lawsuit Over Delayed Twitter Stake Disclosure

Elon Musk has filed a motion to dismiss a U.S. Securities and Exchange Commission (SEC) lawsuit accusing him of delaying disclosure of his 2022 Twitter stake. The outcome could have significant implications for corporate governance and regulatory enforcement in securities markets.

The SEC alleged that Musk violated federal securities law by waiting 11 days past the deadline to disclose his purchase of 5% of Twitter’s common shares. Under SEC rules, investors must disclose such holdings within 10 calendar days. In Musk’s case, the deadline was March 24, 2022. The disclosure came on April 4, 2022, when Musk revealed a 9.2% stake in the platform, later rebranded as X.

According to the SEC, Musk continued buying shares during the delay, acquiring over $500 million worth of stock at prices it considered artificially low. The regulator said the delay disadvantaged other investors by preventing them from making informed decisions in the market.

The lawsuit, filed in Washington, D.C. federal court in January, seeks civil penalties and disgorgement of profits the SEC claims Musk made from the alleged violation. Musk was given a deadline to respond to the court by Friday.

Musk’s legal team argued that the billionaire ceased additional purchases before filing and that he acted in good faith. His lawyers said he submitted the disclosure one business day after his wealth manager consulted with disclosure counsel about regulatory requirements. They emphasized that the SEC did not accuse Musk of intentional or reckless misconduct.

“The SEC does not allege that Mr. Musk acted intentionally, deliberately, willfully, or even recklessly,” his lawyers stated. “Rather, the SEC alleges that Mr. Musk late-filed a single beneficial ownership form three years ago, and fully corrected any alleged error immediately upon its discovery. There is no ongoing violation.”

The SEC has not commented publicly outside regular business hours.

Musk has a history of disputes with the agency. In 2018, the SEC sued him over Twitter posts about taking Tesla private, leading to a settlement that required greater oversight of his communications. The current case further underscores long-standing tensions between Musk and U.S. regulators.

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