Billionaire Elon Musk filed a motion on Thursday to dismiss the U.S. Securities and Exchange Commission’s civil lawsuit that accused him of waiting too long in 2022 to reveal his large stake in social media platform Twitter, later renamed as X.
In a complaint filed in Washington, D.C. federal court in January, the SEC said Musk violated federal securities law by waiting 11 days too long to disclose his initial purchase of 5% of Twitter’s common shares. It sought to force Musk to pay a civil fine and give up profits that the SEC said were a result of the violations.
Lawyers for Musk said on Thursday the billionaire stopped purchasing additional shares of then-publicly-listed Twitter and filed his disclosure one business day after his wealth manager consulted securities disclosure counsel about potential filing requirements.
An SEC rule requires investors to disclose within 10 calendar days when they cross a 5% ownership threshold, which would have been by March 24, 2022, in Musk’s case.
The SEC said that at the expense of unsuspecting investors, Musk instead bought more than $500 million of Twitter shares at artificially low prices before finally revealing his purchases on April 4, 2022, by which time he owned a 9.2% stake.
