Investing.com– The Securities and Exchange Commission sued Tesla (NASDAQ:) CEO Elon Musk in federal court on Tuesday over alleged violations of securities law when taking a substantial stake in Twitter.
The move drew a sharp rebuke from Musk on X, who called the SEC a “totally broken organization” that spends its time on “s*** like this when there are so many actual crimes that go unpunished.”
The SEC claimed that Musk did not disclose a major purchase of Twitter shares in time before his takeover of the social media platform, according to a court filing. Musk had allegedly built up a stake of over 5% in Twitter, which he did not disclose, allowing him to purchase Twitter shares at a lower price, by at least $150 million.
Musk- who had taken Twitter private for $44 billion in 2022 and rebranded the firm as X Corp- was under investigation by the SEC over alleged securities fraud. The regulator was also reportedly looking into his sales of Tesla stock to fund his Twitter buyout.
Musk had revealed last month that the SEC had issued a settlement demand against him, pressuring the Tesla CEO to agree to a deal within 48 hours or face charges on numerous counts over his Twitter purchase.
Musk has repeatedly come under scrutiny from the SEC over his alleged violations of securities law. The Tesla CEO was slapped with a lawsuit in the late-2010s over making misleading statements over taking Tesla private.
Tuesday’s lawsuit is expected to be some of the SEC’s last few enforcement actions under the current Biden Administration. President-elect Donald Trump is set to take office from January 20, and has vowed to overhaul the regulator’s leadership.
SEC Chair Gary Gensler said he will step down when Trump takes office. The President-elect last month nominated former SEC Commissioner Paul Atkins to replace Gensler.
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