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Elon Musk has agreed to pay $1.5 million to settle a long-running disclosure dispute with the Securities and Exchange Commission. The latest development finally draws a line under a case linked to his 2022 acquisition of Twitter. This case dates back to Musk’s initial purchase of a stake, when he crossed the 5 percent ownership threshold. US securities law requires investors to disclose such holdings within a defined timeline.
Regulators alleged that Musk delayed this disclosure by 11 days. The delay, according to the SEC, allowed him to continue buying shares at lower prices, saving over $150 million while other shareholders remained unaware of his growing position.
Musk opted to settle without admitting wrongdoing, a common approach in SEC enforcement actions. The agreement, filed in a federal court in Washington, DC, will need the court's approval. The action suggests he wants to avoid court cases that could harm him.
Earlier, the SEC charged him with ‘gamesmanship’ during the investigation, alleging he was unhelpful and delayed responding to their subpoenas. Musk accused the SEC chairman, Gary Gensler, of abuse of power and harassment.
According to Reuters, the $1.5 million fine is the largest penalty imposed by the SEC for this category of disclosure violations. In contrast, the limited scope of the financial repercussions stands in stark contrast to the significant benefits allegedly derived, underscoring the need for appropriate measures in US securities enforcement.
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The dispute emerged against the backdrop of a changing political landscape in Washington. Gensler resigned shortly after the lawsuit was filed, with the presidency once again held by Donald Trump. With such a change of administration, another dimension was added to an already notable enforcement case.
Approval of the deal will mark the end of the case, thus lifting yet another cloud over Musk’s affairs. With the settlement concluded, he can now concentrate on other aspects of running his companies.
