Elon Musk has asked a federal judge to dismiss a US Securities and Exchange Commission (SEC) lawsuit alleging he delayed disclosure of his Twitter share purchases in 2022, accusing the regulator of overreach and unfairly targeting him for criticizing it.
The SEC filed the lawsuit in January, claiming Musk waited 11 days to reveal his initial 5% stake in Twitter, which it said allowed him to purchase more than US$500 million in shares at lower prices, potentially saving him $150 million at the expense of other investors.
The SEC is seeking disgorgement of those gains and a civil penalty.
In a filing late Thursday in Washington, D.C. federal court, Musk’s legal team argued the delay was inadvertent.
They stated that he disclosed a 9.2% Twitter stake on April 4, 2022, one business day after his wealth manager consulted legal counsel regarding filing requirements.
“There is no ongoing violation. There is no intent. There is no harm,” Musk’s filing stated. “Simply put, this action is a waste of this court’s time and taxpayer resources.”
His team also characterized the proposed $150 million payout as excessive, citing that the SEC has sought far smaller penalties in similar cases.
The SEC requires shareholders to disclose ownership exceeding 5% within 10 calendar days to protect other investors from being blindsided by large stakes in public companies.
The regulator responded in a filing on Friday, saying Musk’s intent does not absolve him of violating key public reporting rules under federal securities law.
Musk, the world’s richest person, completed the $44 billion acquisition of Twitter in October 2022 and renamed the company X. His broader business portfolio includes Tesla and SpaceX.