In the lawsuit filed by the SEC in the capital Washington, it was claimed that Musk violated federal securities laws by not submitting the report to the Commission on time, explaining that he purchased more than 5 percent of Twitter shares in March 2022.
In the case file, which states that Musk was able to continue purchasing shares at low prices, it was claimed that this situation allowed Musk to underpay at least $150 million.
It was reminded in the file that Musk started purchasing a significant amount of Twitter shares in early 2022, and by March 14, 2022, he owned more than 5 percent of the company’s outstanding shares.
MUSK DID NOT NOTIFY THE SEC
It is noted in the file that, according to the relevant laws, there is an obligation to notify the SEC within ten calendar days after the 5 percent threshold is exceeded, and that Musk did not do this.
It was stated in the file that 11 days after this period expired, on April 4, 2022, Musk announced in his report to the SEC that he had purchased more than 9 percent of Twitter shares, and on the same day, Twitter’s share price increased by more than 27 percent.
INVESTORS SOLD TWITTER SHARES AT ARTIFICIALLY LOW PRICES
The lawsuit stated that during the period Musk delayed making the notification, investors sold Twitter shares at artificially low prices and suffered significant economic losses.
In its lawsuit, the SEC asked the court to order Musk to pay a fine and return the ill-gotten gains he earned from stock purchases.