Judge Delays Approval of Musk’s SEC Settlement
A federal judge declined to immediately validate a $1.5 million settlement between the Securities and Exchange Commission (SEC) and Elon Musk regarding his Twitter acquisition. The judge is seeking additional details to assess the deal’s fairness and the context in which it was made.
This settlement stems from an SEC lawsuit that accused Musk of delaying, by 11 days, the disclosure of his 5% stake in Twitter, which he later upped to 9.2% in April 2022. That delay reportedly allowed him to save $150 million before he purchased Twitter for $44 billion six months later.
U.S. District Judge Sparkle Skunanan, based in Washington, D.C., emphasized her need to evaluate multiple factors before settling this case. This includes analyzing whether the agreement is fair for both sides, its benefit to the public, and whether it’s free from any form of improper collaboration or corruption.
The judge has instructed both parties to return to court on May 13 with a proposed timeline for submitting supporting briefs for the settlement. It’s a bit unexpected, right? There may be more to unpack here.
Musk’s attorney hasn’t commented on the situation, nor has the SEC provided an immediate response to inquiries.
This lawsuit was filed on January 14, 2025, just days before then-President Joe Biden’s departure from the White House. Musk, who was previously an advisor to Trump, has claimed that this legal action is politically influenced and has insisted that the late disclosure wasn’t intentional.
Interestingly, the Trump administration had previously scaled back on enforcement against certain corporate misconduct, and under current SEC Chairman Paul Atkins, there seems to be a shift in enforcement priorities.
Just recently, Musk and the SEC revealed that they had engaged in settlement talks on March 17, coinciding with the sudden resignation of SEC Chief Enforcement Officer Margaret Ryan.
It’s worth noting that this settlement does not require Musk to admit any wrongdoing or relinquish any funds he might have saved during the delay.
As for Twitter—now rebranded as “X”—it has become part of Musk’s other venture, SpaceX.
