Elon Musk agreed to settle an SEC lawsuit over delayed Twitter stock disclosures with a $1.5 million civil fine, without admitting wrongdoing.
Elon Musk has agreed to settle a U.S. Securities and Exchange Commission lawsuit accusing him of waiting too long to disclose his early purchases of Twitter shares in 2022, with a trust in his name set to pay a $1.5 million US civil penalty.
The settlement was disclosed Monday in federal court in Washington, D.C., and still requires approval from U.S. District Judge Sparkle Sooknanan. Musk did not admit wrongdoing, and the proposed resolution does not require him to return any of the $150 million the SEC alleged he saved because of the delayed disclosure.
The SEC’s January 2025 lawsuit said Musk was 11 days late in revealing an initial five per cent stake in Twitter in late March and early April 2022. The regulator alleged the delay allowed him to buy more than $500 million in additional shares at artificially low prices before he disclosed a 9.2 per cent stake.
Musk completed his $44 billion purchase of Twitter in October 2022. The company is now known as X.
Musk had described the late filing as inadvertent and accused the SEC of targeting him in violation of his free speech rights. His lawyer, Alex Spiro, said in a statement that “Mr. Musk has now been cleared of all issues related to the late filing of forms in the Twitter acquisition, as we said from the outset he would be.” The SEC declined to comment.
The settlement is far smaller than what the SEC had sought when it filed the case. The agency had asked for a civil penalty and for Musk to repay the $150 million it said he saved at the expense of investors who sold shares before his stake became public.
Amanda Fischer, a former chief of staff to former SEC chair Gary Gensler, criticized the outcome as embarrassing for the agency. Robert Frenchman, a partner at the Dynamis law firm in New York, told CBC News the penalty was modest for Musk but could still signal to the market that disclosure rules apply broadly.
The deal would end another dispute in a long-running fight between Musk and the SEC that dates to 2018, when the regulator charged him with securities fraud over a post saying he had secured funding to potentially take Tesla private. Musk settled that case by paying a $20 million civil fine, stepping down as Tesla chair and agreeing to have some Tesla-related social media posts reviewed in advance.
The Twitter disclosure settlement does not end all litigation tied to Musk’s takeover. A separate shareholder case is still proceeding after a San Francisco jury held Musk liable in March for defrauding Twitter shareholders after the buyout was announced. Musk’s lawyers have asked for that verdict to be dismissed or for a new trial.
The next step in the SEC case is the judge’s review of the proposed settlement.
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