The SEC is investigating Tesla CEO Elon Musk’s disclosure of his stake in Twitter according to a recent letter sent by the agency.
The New York Post reports that the SEC has launched an investigation into Tesla CEO Elon Musk’s disclosure of his stake in Twitter in early April. In the letter, the SEC asked Musk why it appears that he did not file the required paperwork within 10 days of the acquisition.
The SEC demanded more information from Musk on his public statements regarding whether Twitter adheres to free speech principles. The commission also asked Musk to explain his decision to file a 13G disclosure form which is usually filed by investors that plan to hold their shares passively. The SEC asked Musk why he didn’t file a 13D form which is for activist investors aiming to influence the management and policies of the company they have invested in — something which Musk had clear plans to do.
Musk’s attempt to acquire Twitter is becoming increasingly complicated; Breitbart News recently reported that a new lawsuit has been filed on behalf of Twitter shareholders against him. The lawsuit alleges that Musk has been actively manipulating the company’s stock for his own gain.
The lawsuit focuses on Musk’s conduct since signing the buyout offer to acquire Twitter on April 25, particularly his recent comments stating that the deal “cannot move forward” without more information about bot accounts on the platform.
The complaint alleges that after signing the agreement: “Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and drive Twitter’s stock down substantially in order to create leverage that Musk hoped to use to either back out of the purchase or re-negotiate the buyout price.”
The complaint adds: “As detailed herein, Musk’s conduct was and continues to be illegal, in violation of the California Corporations Code, and contrary to the contractual terms he agreed to in the deal.”
The lawsuit is a proposed class action brought by a group of shareholders and is seeking damages that would be distributed among anyone holding Twitter stock. The complaint is seeking injunctive relief by the court which could potentially force Musk to purchase Twitter at the agreed-upon price of $54.20, despite Twitter stock currently trading below $40.
Read more at the New York Post here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address firstname.lastname@example.org