Elon Musk Seeks Dismissal of SEC Lawsuit

Elon Musk has requested a federal judge to dismiss a civil lawsuit initiated by the U.S. Securities and Exchange Commission (SEC) related to his acquisition of Twitter shares back in 2022.

In a motion submitted on Thursday, Musk claimed that the SEC acted unfairly, suggesting they took longer than the mandated 10 days to report that he had exceeded 5% ownership of Twitter shares.

Musk criticized what he referred to as the SEC’s “selective enforcement” of securities regulations, arguing that it targets individuals based on their protected criticisms of government actions.

“There are no ongoing violations, no intentions, no harm,” he asserted. “This measure is just a waste of time for the court and taxpayer resources.”

The lawsuit, which is taking place in Washington, D.C., examines whether Musk’s filings in March and April of 2022 adhered to the Stock Exchange Act.

The SEC’s complaint from January suggested that Musk’s delayed disclosures had cost at least $150 million and accused him of using a form designed for passive investors, despite his active role in managing Twitter.

Musk completed the Twitter acquisition for $44 billion in October 2022 and later rebranded it as X.

Moreover, in March, a federal judge permitted shareholder lawsuits to move forward, as former Twitter investors argued that Musk had notably delayed his disclosures, intensifying scrutiny over the deal.

This situation echoes Musk’s earlier confrontations with regulators, notably the high-profile 2018 incident where he tweeted about taking Tesla private at $420 a share, which led to market turmoil.

Following that incident, the SEC filed a securities fraud case against Musk, which culminated in his resignation as Tesla’s chairman and a settlement that included a $20 million fine.

In a recent court document, the SEC contended that Musk’s intent was irrelevant and that he should be held accountable for breaching essential public reporting obligations under federal securities laws.