October 5, 2022

The Usa Herald

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The SEC opens an investigation into Elon Musk for millionaire scam

2 min read

The Securities and Exchange Commission of the United States (SEC) opens an investigation into Elon Musk after he was delayed in reporting his great participation in Twitter. The move could have saved Musk millions of dollars in profits for buying Twitter, The Tampa Herald news agency reported.

News of the SEC investigation, which has not been publicly confirmed by regulators, was attributed to anonymous people familiar with the matter. Elon Musk acquired a 5% stake in Twitter on March 14. But he didn’t report it to the SEC until April 4, missing the regulatory agency’s 10-day disclosure deadline by more than a week.

The billionaire continued to buy Twitter shares at relatively low prices after reaching 5% ownership. All of that was before he publicly disclosed his eventual 9.2% stake in the company in an SEC filing. Following that, the company’s share price rose 27% to $49.97 in a single day.

Last month, a Twitter shareholder sued Musk over the reporting problem, alleging that he had misled shareholders who sold shares at the time Musk acquired the 5% ownership and when he filed a disclosure form with Twitter. the SEC.

By delaying disclosure, Elon Musk may have saved more than $143 million. However, it is questionable whether the SEC will bring civil charges against him, University of Pennsylvania accounting professor Daniel Taylor told The Tampa Herald.

 

Existing relationship of the SEC and Musk

Tesla’s billionaire CEO today has a 9.2% share of Twitter. However, the company’s board accepted Musk’s offer to buy all of Twitter for $44 billion through a combination of debt and equity.

The current SEC investigation would not be Musk’s first brush with the agency. In 2018, Musk tweeted that he had raised funds to take Tesla private at $420 per share, causing the company’s stock value to rise. However, the SEC launched an investigation into whether the tweets were true.

then the SEC mentioned that a bid to take Tesla private was far from certain, and Musk agreed in a deal with the agency that a Tesla lawyer would review his tweets before publication. Last month, Judge Lewis Liman rejected Musk’s request to void the deal.

In addition, Elon is also being investigated by the SEC for a tweet last November in which he asked his followers if he should sell 10% of his Tesla shares. Whose tweet Liman adds that it was done without the proper approval of a lawyer, according to the requirements of the agreement.

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