The U.S. regulator has alleged that Musk’s delayed disclosure of his 5% stake buildup in 2022 ultimately caused Twitter shareholders to lose $150 million.
Elon Musk has asked a federal judge to dismiss a Securities and Exchange Commission lawsuit alleging that he cost erstwhile Twitter, Inc. shareholders money for failing to disclose his rising stake, according to a Bloomberg report.
In a suit filed in January, the SEC alleged that Musk missed a deadline to file a special form stating he had accumulated at least a 5% ownership stake in Twitter before launching his takeover bid for the social media platform three years ago.
Musk flouted securities law by waiting too long (he missed the filing deadline by 11 days), which cost Twitter shareholders more than $150 million, according to the suit.
Musk’s attorneys wrote in a court filing late Thursday that the suit does not allege that Musk acted willfully or recklessly, and, as such, it “is a waste of this court’s time and taxpayer resources,” according to the Bloomberg report.
Musk’s stake disclosure would have sent Twitter’s stock price soaring; its investors missed out on those gains, the suit says. The billionaire has earlier said that the SEC’s suit is a “campaign of harassment” against him.
The lawsuit was closely watched due to its timing. It emerged when Musk had become one of the top backers of President Donald Trump, with whom his relationship later floundered.
Musk’s chaotic takeover of Twitter, now called X, raised many eyebrows at the time. After signing the deal in April 2022, he backed out, which led to Twitter management and investors suing him. He ultimately returned to close the deal in October 2024, purchasing Twitter for $44 billion.
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