With the clock running out on the Biden administration, the US Securities and Exchange Commission has sued Elon Musk in federal court. The law at hand is relatively straightforward. Complaint time is more complicated. The SEC’s complaint centers on Musk’s acquisition of Twitter shares in early 2022. According to the complaint, Musk failed to notify the agency that he had acquired more than 5 percent of the company’s common stock within 10 calendar days. If true, the delay would violate federal securities laws. “As a result, Musk can continue to buy shares at low prices,” the SEC said, “allowing him to pay at least $150 million for the shares he bought after reporting beneficial ownership.” The SEC has requested a jury trial. This should all be quite simple. “It looks like a straightforward case of a clear violation of established SEC rules,” said James Park, a professor at the UCLA School of Law who focuses on securities regulation and corporate law. You can send the document in 10 days or not; The SEC claims that Musk did not. He acquired enough shares to pass that threshold on March 14 of that year, the agency said, and did not publicly disclose his holdings until April 4. March 24.) But it took almost three years for the SEC to bring a case. “The question is, why are they doing it now,” said David Rosenfeld, former cohead of the SEC’s enforcement office in New York and now a professor at Northern Illinois University College of Law. “The only possible answer is that they want to finish before the administration changes.” Rosenfeld noted that he did not examine the SEC’s complaint in depth. The executive branch’s reshuffle, which occurred in less than a week, creates a more favorable regulatory environment for Musk, who has donated hundreds of millions of dollars to political action committees that support President Donald Trump. campaign and reportedly has been a close advisor to the president-elect during the transition period. Current SEC chair Gary Gensler is likely to be replaced by Trump’s nominee, Paul Atkins, who is seen by many as supporting a lighter regulatory touch. Musk’s attorney, Alex Spiro, said he believes the complaint is a parting shot. “As the SEC resigns and leaves office, the SEC’s multiyear campaign of harassment against Mr. Musk has finally resulted in the filing of a one-count ticky-tack complaint against Mr. Musk,” he wrote in an email. While the filing comes ahead of Trump’s Jan. 20 Inauguration, the investigation that led to the complaint has been going on for years. The agency was due to subpoena Musk in May 2023 to testify in the investigation and said Musk canceled two days before his scheduled testimony in September. A federal court upheld a previous decision to compel him to testify in May 2024; SEC lawyers flew in to interview him on September 10, but he stayed behind to attend the SpaceX launch.
SEC Sues Elon Musk. It’s All in Time
