Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at the recent lawsuit filed by the SEC against Elon Musk for his purchase of social media platform Twitter.
SEC Sues Elon Musk
A lawsuit has been filed by the Securities and Exchange Commission (SEC) against billionaire Elon Musk. Within they allege that he violated disclosure rules in his 2022 Twitter share acquisition. This suit was filed last Tuesday and it notes that Musk underpayed by $150 million while also breaching securities laws. The complaint also noted that Musk failed to properly disclose his ownership in the company, enabling him to purchase shares at what the SEC claims were “artificially low prices.”
The accusations against the worlds richest man note he waited too long to disclose in 2022 he had amassed a large stake in Twitter. As part of SEC rulings there are disclosure requirements and by not reporting his Twitter holdings he was in violation. He had exceeded the 5% threshold mandated by law when he was required to disclose his ownership intentions.
The lawsuit was filed in Washington, D.C. federal court, and the SEC note that Musk waited 11 days too long to disclose his initial purchase of 5% of Twitter's common shares. The SEC rule states that investors must disclose within 10 calendar days, or by March 24, 2022 in Musk's case, when they cross a 5% ownership threshold.
The SEC go on to state that Musk purchased a further $500 million of Twitter shares at artificially low prices before finally revealing his purchases on April 4, 2022, by which time he owned a 9.2% stake. Twitter's share price rose more than 27% following that disclosure, the SEC said. This in turn means Musk managed to underpay by at least $150 million for additional shares, according to the SEC.
Musk later went on to acquire Twitter for $44 billion in October 2022 and rebranded it as X. He built a substantial stake in the social media platform before initiating the buyout and the SEC have been investigating ever since in terms of whether or not Musk or any associates engaged in securities fraud linked to the acquisition. As part of the investigation there has been scrutiny of transactions involving Tesla shares, which Musk sold to finance the purchase. A lawyer for Musk, Alex Spiro, noted that he believes the SEC's allegations are baseless. He described the lawsuit as a sham and part of a long-standing campaign against Musk. He also noted that the lawsuit is the culmination of the regulators "multi-year campaign of harassment" against his client. Spiro stated:
"Today's action is an admission by the SEC that they cannot bring an actual case. Mr. Musk has done nothing wrong and everyone sees this sham for what it is."
There has also been controversy regarding plans by X to prioritise 'informative' or 'educational content' on the platform. This is supposedly to combat negativity, but many feel it could suppress diverse viewpoints, with some accusing Musk of using these changes to censor specific groups. It has also extended to allegations of censorship involving political debates. Musk faced backlash after critics claimed he removed premium features from accounts opposing his proposed U.S. immigration reforms. The likes of Vitalik Buterin, co-founder of Ethereum, has given warnings that moves such as this could undermine free speech.
Musk is an adviser to U.S. President-elect Donald Trump and is currently valued at $417 billion. He is worth nearly twice as much as Amazon.com founder Jeff Bezos, the world's second-richest person at $232 billion. These figures are according to Forbes. The lawsuit against Musk comes a mere six days before Trump takes office, and current chair of the SEC Gary Gensler is stepping down that day. Paul Atkins has been nominated by Trump to take the position and it is believed he will review many of Gensler's rules and enforcement actions.
On the global stage Musk has also faced criticism, with German authorities accusing him of attempting to swap the nations upcoming elections by endorsing Alternative für Deutschland (AfD), a far-right political party. The endorsement by Musk was met with a backlash from officials, with German Chancellor Olaf Scholz often facing criticism from Musk on X. Musk has defended his actions, citing his right to express opinions as a business operator in Germany.
https://x.com/elonmusk/status/1867357433493872874
Have a great day.
Peace. CryptoGod-1.
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