By Jonathan Stempel and Douglas Gillison
WASHINGTON/NEW YORK, May 4 (Reuters) – Elon Musk settled the U.S. Securities and Exchange Commission’s civil lawsuit accusing the world’s richest person of waiting too long in 2022 to disclose his initial purchases of Twitter, now known as X.
A trust in Musk’s name will pay a $1.5 million civil penalty, without admitting wrongdoing. Musk won’t have to give up any money he allegedly saved from the delay.
The settlement was disclosed on Monday in the Washington, D.C., federal court. Lawyers for Musk did not immediately respond to requests for comment.
In its January 2025 lawsuit, the SEC said Musk’s 11-day delay in revealing his initial 5% Twitter stake in late March and early April 2022 let him buy more than $500 million of shares at artificially low prices.
The SEC had argued that Musk should pay a civil fine and repay the $150 million he allegedly saved at the expense of unsuspecting investors.
Musk called the delay inadvertent, and accused the SEC of violating his free speech rights by targeting him.
He completed the $44 billion Twitter purchase in October 2022.
Musk’s civil penalty is the largest in SEC history for the type of violation he was accused of, a person familiar with the settlement said.
The SEC’s effort to recoup the $150 million may have been tough to prove in court, people familiar with the settlement said.
Musk has had a fraught relationship with the SEC, starting in September 2018 when the regulator charged him with securities fraud for saying on Twitter he had “secured” funding to potentially take his electric car company Tesla private.
He settled that case by paying a $20 million civil fine, letting Tesla lawyers review some Twitter posts in advance, and giving up his role as Tesla’s chairman.
Monday’s settlement came three months after U.S. District Judge Sparkle Sooknanan rejected Musk’s bid to dismiss the case. Both sides disclosed on March 17 they were in talks to settle.
The SEC sued Musk six days before former U.S. President Joe Biden left the White House and was replaced by Donald Trump. Current SEC Chairman Paul Atkins has been refocusing the regulator’s enforcement priorities.
(Reporting by Jonathan Stempel in New York and Douglas Gillison in Washington, D.C.; editing by David Gaffen and Deepa Babington)
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