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Thursday, May 26, 2022

Elon Musk Faces SEC Investigation for Belated Disclosure of Twitter Stake, Report Says

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Billionaire Elon Musk is reportedly facing a US Securities and Exchange Commission (SEC) investigation for not disclosing his large stake in Twitter on time.

The Wall Street Journal, citing people familiar with the matter, reported that the SEC is looking into his late disclosure. In April, the SEC declined to comment on a potential investigation. The SEC didn’t immediately respond to a request for comment on Wednesday.

Musk acquired a 9.2% stake in Twitter, making him one of the largest shareholders of the social network.

He first revealed his stake on April 4, at least 10 days after he was supposed to file a public form to the SEC that investors must submit when they buy more than 5% of a company’s shares.

The tardy submission allowed him to buy more stock without alerting other shareholders. The filing could have signaled to shareholders that Musk may have been interested in taking control of Twitter.

In late April, Musk struck a deal with Twitter to purchase the company for $44 billion and take it private.

University of Pennsylvania accounting professor Daniel Taylor told The Wall Street Journal that Musk, who also runs Tesla and SpaceX, likely saved $143 million by not reporting his stake earlier.

Musk could not immediately be reached for comment.

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