Billionaire Elon Musk filed a motion on Thursday to dismiss the U.S. Securities and Exchange Commission’s (SEC) civil lawsuit that accused him of waiting too long in 2022 to reveal his large stake in social media platform Twitter, later renamed as X.
In a complaint filed in Washington, D.C. federal court in January, the SEC said Musk violated federal securities law by waiting 11 days too long to disclose his initial purchase of 5% of Twitter’s common shares. It sought to force Musk to pay a civil fine and give up profits that the SEC said were a result of the violations.
Lawyers for Musk said on Thursday the billionaire stopped purchasing additional shares of then-publicly-listed Twitter and filed his disclosure one business day after his wealth manager consulted securities disclosure counsel about potential filing requirements.
An SEC rule requires investors to disclose within 10 calendar days when they cross a 5% ownership threshold, which would have been by March 24, 2022 in Musk’s case.
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The SEC said that at the expense of unsuspecting investors, Musk instead bought more than $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.
The SEC sued Musk on January 14, six days before Republican President Donald Trump took office and made Musk a special adviser to slash the federal workforce and spending.
Musk faced a deadline to respond to the court by Friday.
Musk’s lawyers said the case should have not been brought and the billionaire did not mean any harm. They said the SEC’s action against Musk “reveals an agency targeting an individual for his protected criticism of government overreach.”
“The SEC does not allege that Mr. Musk acted intentionally, deliberately, willfully, or even recklessly… Rather, the SEC alleges that Mr. Musk late-filed a single beneficial ownership form three years ago, and fully corrected any alleged error immediately upon its discovery. There is no ongoing violation,” the Tesla and SpaceX CEO’s lawyers said.
The SEC declined to comment.
Musk has long feuded with the SEC, including after it sued him in 2018 over his Twitter posts about possibly taking Tesla private and having secured funding to do so.
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