Key Points:
- Elon Musk is negotiating with the SEC to settle a lawsuit.
- The SEC accused Musk of violating securities law during his Twitter buyout.
- Musk delayed disclosing a significant stake in Twitter, allegedly buying shares cheaply.
- He previously settled similar charges with the SEC involving Tesla.
Elon Musk is reportedly in discussions with the Securities and Exchange Commission (SEC) to resolve a lawsuit filed last year. The regulator accused Musk, the world’s wealthiest individual, of breaking securities law during his acquisition of Twitter.
In a recent court document, the SEC revealed that it’s “engaged in discussions of a potential resolution.” This suggests that further legal proceedings might not be needed if both parties can reach an agreement. The original lawsuit began in January 2025 and is being handled by a federal court in Washington, D.C.
Separately, a class-action lawsuit filed by former Twitter investors against Musk is moving forward in a San Francisco federal court. A jury is expected to begin deliberations in that case soon, adding to Musk’s legal challenges related to the Twitter deal.
Musk, who leads both Tesla and SpaceX, bought Twitter for $44 billion in late 2022 and later rebranded it as X. Before the buyout, he built up a stake in the company that exceeded 5%. Regulations require investors to publicly disclose such a holding within 10 calendar days of reaching that threshold, but Musk filed his disclosure late.
The SEC’s complaint argues that Musk’s delay in disclosing his stake allowed him to purchase additional shares at “artificially low prices.” This put other investors at a disadvantage, according to the regulator.
Musk’s legal team did not immediately respond to requests for comment, and the SEC also declined to comment on the ongoing discussions.
This isn’t Musk’s first run-in with the SEC over securities fraud. He previously settled civil charges with the regulator concerning Tesla. In that case, both Musk and Tesla each paid $20 million in fines, and Musk temporarily stepped down as chairman of Tesla’s board. This history highlights a pattern of scrutiny from financial regulators regarding his public statements and actions related to his companies.
