Elon Musk and the Securities and Exchange Commission (SEC) have reached a settlement over a long-running dispute. The Tesla CEO will only have to pay a $1.5 million fine for violating securities laws when he took over Twitter in 2022.
Musk became embroiled in an SEC investigation after he delayed disclosing his initial purchase of Twitter shares. The watchdog formally sued him last year in the District Court of Columbia.
The billionaire acquired over 5 percent of Twitter’s stock before buying the social media platform. At that level of stock ownership, Musk was obligated to publish his holdings within 10 days, but failed to do so until the 11th day. He eventually paid $44 billion for Twitter after the company threatened to sue him.
The SEC argued that Musk was able to buy Twitter shares at a discount because he did not disclose his initial stake. The SEC claimed that the action cost other investors potential gains.
Musk, however, had been negotiating with the SEC to reach a resolution. A trust controlled by Musk will pay the fine as a civil penalty, instead of the $150 million initially sought by the SEC. The settlement is awaiting final approval by the presiding judge.
Meanwhile, Musk is a defendant in another jury trial in California, stemming from the same incident. The class-action suit was found in favour of the plaintiffs who complained that Musk deceived Twitter investors. His lawyers plan to appeal.
Musk has had previous run-ins with the SEC. He and Tesla were fined $20 million each after he was found to have breached regulations during a 2018 attempt to take Tesla private.
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