U.S. securities regulators sued Elon Musk in federal court in Washington on Tuesday in an enforcement action stemming from his $44 billion purchase of Twitter, now called X.
The lawsuit against Mr. Musk, who has become a close adviser to newly elected President Donald J. Trump, will likely be one of the more controversial final actions of the Securities and Exchange Commission under Gary Gensler, its outgoing chairman.
The SEC alleges that by purchasing Twitter in 2022, Mr. Musk violated securities laws by amassing a large stock position in the company without filing proper notice. The complaint stated that he waited 11 days before filing the required disclosure with the SEC
The regulatory filings are required so that investors in the market can monitor the movements of major investors and potential takeover bids.
In recent weeks, Musk had blasted the SEC in posts on X about the possibility of filing a lawsuit. In December, he shared a letter his lawyer sent to the agency rejecting a settlement offer in the case.
This is the third time the SEC has gone to court with Mr. Musk, with the first case brought by securities regulators during Mr. Trump's first term. That lawsuit stemmed from inappropriate market-moving posts Mr Musk made about his musings about taking his electric car company Tesla private.
Before filing the lawsuit on Tuesday, the SEC had gone to court to force Mr. Musk to comply with a subpoena seeking his deposition.
With Mr. Gensler resigning at Mr. Trump's inauguration on Monday, it is unclear whether regulators will pursue the lawsuit. Mr. Trump has said he plans to nominate Paul Atkins, a former SEC commissioner and pro-business conservative, to succeed Mr. Gensler.
This is a development story. Check back for updates.
