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US regulatory agency files lawsuit against Elon Musk for delayed disclosure of Twitter investment | Technology


The US Securities and Exchange Commission (SEC) has sued Tesla CEO Elon Musk for allegedly failing to disclose his stake in Twitter before purchasing the social media platform, resulting in him underpaying by at least $150 million for shares. Musk acquired more than 5 percent of Twitter’s stock in March 2022 but failed to notify regulators within the required 10-day period. This allowed him to continue buying shares at lower prices due to the undisclosed information. Musk eventually disclosed his ownership of over 9 percent of Twitter’s stock, 11 days late, causing Twitter’s stock price to increase by 27 percent. The SEC claims that Musk’s actions harmed investors who sold their shares at artificially low prices during this period. This is not the first time Musk has faced legal action from the SEC, as he settled a lawsuit in 2018 over a misleading Twitter post. Despite facing this new lawsuit, Musk completed his purchase of Twitter for $44 billion in October 2022. The timing of the SEC’s latest enforcement action, just before Chair Gary Gensler is set to step down, raises questions about the future of the lawsuit under Gensler’s successor. It remains to be seen if the legal proceedings will continue under the new SEC leadership, especially since Musk is considered a key ally of incoming President Donald Trump.

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Photo credit www.aljazeera.com

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