Elon Musk has been sued by the US financial regulator over a claim that he was able to buy Twitter shares at "artificially low prices" because he was slow to declare his stake in the social media platform that he has since acquired and renamed X.
The Securities and Exchange Commission issued a statement on Tuesday saying that it has filed an action against Tesla and SpaceX boss Musk.
It alleges that while Musk owned a 5% stake in Twitter, he then "failed to timely file a beneficial ownership report", and went on to buy $500 million more shares "at artificially low prices from the unsuspecting public".
This late filing of his shareholding, which violated reporting requirements, saved Musk "at least $150 million at the expense of Twitter shareholders", the SEC has calculated.
Beneficial ownership reporting requirements were put into law to help investors make informed investment decisions, the regulator noted.
The complaint also alleges that investors that sold Twitter common stock between March 25 and April 1 also did so at artificially low prices, "thereby suffering substantial economic harm".
Under the filing, made with a district court in Washington DC, the SEC said it was seeking "permanent injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties".