On December 13, sources indicate that Elon Musk disclosed that the U.S. Securities and Exchange Commission (SEC) had issued a settlement proposal requiring him to comply with certain fines and conditions within 48 hours. Failure to comply could result in dire legal repercussions related to the purchase, sale, and disclosure of Twitter shares. The SEC is delving into potential securities fraud allegations that emerged prior to Musk’s acquisition of Twitter (now rebranded as X) in 2022, specifically scrutinizing whether his divestment of Tesla shares and subsequent Twitter purchases breached legal disclosure timelines.
This is not Musk’s first encounter with the SEC; the agency previously filed a lawsuit against him for his infamous tweet concerning the privatization of Tesla in 2018, leading to a $20 million settlement. Musk’s legal representation has described recent SEC actions as prolonged harassment over several years, raising questions about possible influence from the executive branch of the government. Additionally, Musk is grappling with other civil lawsuits that accuse him of failing to transparently communicate his investment intentions, thereby potentially swaying shareholder decisions unfairly.