Investing.com– The Securities and Exchange Commission sued Tesla (NASDAQ: ) CEO Elon Musk in federal court on Tuesday over alleged securities law violations in taking a significant stake in Twitter.
The SEC alleged that Musk failed to disclose a large purchase of Twitter stock in time before taking over the social media platform, according to a court filing. Musk reportedly built up a stake of over 5% in Twitter, which he did not disclose, allowing him to buy Twitter stock at a lower price, for at least $150 million.
Musk — who took Twitter private for $44 billion in 2022 and rebranded the company as X Corp — has been under investigation by the SEC for alleged securities fraud. The regulator was also reportedly looking into his sale of Tesla stock to finance his buyout of Twitter.
Musk revealed last month that the SEC had issued a settlement demand against him, pressuring the Tesla CEO to agree to the deal within 48 hours or face multiple counts over his Twitter purchase.
Musk has repeatedly come under SEC scrutiny for his alleged violations of securities laws. A Tesla CEO was sued in the late 2010s for making false statements about taking Tesla private.
