Elon Musk filed paperwork in a Washington, DC federal court to dismiss the US Securities and Exchange Commission’s (SEC) civil lawsuit from 2022.
The SEC allege that Musk broke federal securities law by waiting a full 11 days too long to disclose his initial 5% purchase of Twitter’s common shares. With that delay, it allowed Musk to buy another 4.2% of the stock at artificially low prices.
Federal securities law requires investors to disclose the purchase of stocks when they cross the 5% threshold of ownership of a single stock within 10 calendar days. In this case, Musk waited 21 days.
The lawsuit was levied by the SEC to force Musk to pay a civil fine and surrender profits that resulted from the violations.
Musk and his legal team had not responded to the lawsuit and faced a deadline of August 30 to respond to the Court.
Per the filing, Musk’s legal team argued:
The SEC does not allege that Mr. Musk acted intentionally, deliberately, willfully, or even recklessly… Rather, the SEC alleges that Mr. Musk late-filed a single beneficial ownership form three years ago, and fully corrected any alleged error immediately upon its discovery. There is no ongoing violation.
The SEC, for their part, did not respond to media inquiries about the ongoing lawsuit.
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