The US Securities and Exchange Commission (SEC) is investigating Elon Musk's belated disclosure of his purchase of more than 5 percent of Twitter's share, The Wall Street Journal reports. The lag allowed him to purchase more stock without alerting other shareholders, something that may have saved him a significant amount of money. Musk is also facing a lawsuit from Twitter shareholders and a separate FTC probe over the same matter.
Musk disclosed his purchase of the shares on April 4th, 10 days later than the law requires. According to the WSJ's expert, he likely saved over $143 million by not reporting the trade, as the share price may have been higher had the market known about his stake. He eventually acquired 9.2 percent of Twitter, which made him the company's largest shareholder.
In his initial filing, Musk said he was a passive shareholder, but the following day he filed a form that showed more involvement, including an offer to join the board of directors. A week later, he submitted an offer to buy Twitter for $44 billion, which has been approved by Twitter's board. Musk has said that he'll unlock the "extraordinary potential" of the site and that the deal will be good for free speech.
Musk has butted heads frequently with the SEC over the past few years. In February, he asked a judge to overturn his agreement with the SEC that required him to get approval for tweets, accusing the Commission of conducting a "harassment campaign." That request was denied, as was Musk's request to block an SEC subpoena related to possible insider trading.
Musk was also hit with a class-action lawsuit over his Twitter investment. The SEC appears to have a good case against Musk for the late disclosure, but it's not yet clear what it plans to do. However, the lawsuit is unlikely to stop Musk's purchase of Twitter, according to the WSJ.
from Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics https://ift.tt/wLXl8WH
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