A federal judge has approved a $1.5 million settlement between the SEC and Elon Musk’s revocable trust over allegations that Musk was late disclosing his growing stake in Twitter back in 2022. The catch: the judge made it abundantly clear she wasn’t thrilled about it.
US District Judge Sparkle Sooknanan signed off on the consent judgment on July 8, calling the penalty what it functionally is, a rounding error relative to the estimated $150 million in gains Musk allegedly secured by dragging his feet on the required filings. The $1.5 million fine amounts to roughly 1% of those gains.
What Musk actually did
The SEC accused Musk of crossing the 5% ownership threshold in Twitter shares during March and April of 2022, then waiting an additional 11 days beyond the legal deadline to file the required Schedule 13D disclosure. That filing is supposed to alert the market when someone is quietly amassing a significant position in a public company.
By delaying the disclosure, Musk was allegedly able to continue buying Twitter shares at prices that hadn’t yet been inflated by the market’s reaction to his growing stake. Once the filing finally went public, the stock moved. The SEC estimated the timing difference netted Musk around $150 million in additional value.
