The US markets watchdog has filed a lawsuit against Elon Musk alleging he failed to disclose that he had amassed a stake in Twitter, allowing him to buy shares at “artificially low prices.”
The Securities and Exchange Commission (SEC) lawsuit alleges that the multi-billionaire Tesla boss saved $150m (£123m) in share purchases as a result.
According to SEC rules, investors whose holdings surpass 5% have 10 days to report that they have crossed that threshold. Musk did so 21 days after the purchase, the filing says.
Musk’s lawyer did not immediately respond to a BBC News request for comment.
“Musk’s violation resulted in substantial economic harm to investors,” the SEC complaint said.
Twitter’s share price rose by more than 27% after Musk made his share purchase public, the SEC said.
Musk ended up buying Twitter for $44bn in October 2022 and has since changed the platform’s name to X.
The complaint was submitted by the SEC to a federal court in Washington DC on Tuesday.
The lawsuit also asked the court to order Musk to give up “unjust” profits and pay a fine.