Musk is to settle SEC lawsuit over delayed Twitter stake disclosure for US$1.5 million

ELON Musk is expected to bring an end to a legal dispute with the U.S. Securities and Exchange Commission over his share purchases during the takeover of Twitter, under a proposed settlement valued at US$1.5 million.

Bernama-dpa reported on Tuesday that the agreement, disclosed on Monday, will be submitted to a judge for approval, marking a potential conclusion to a case centred on alleged failures to comply with mandatory disclosure rules.

The penalty represents only a fraction of the more than US$150 million the regulator claims Musk effectively saved by delaying disclosure of his growing stake in the company.

In a lawsuit filed in early 2025, the SEC alleged that Musk did not promptly reveal that his shareholding in Twitter had exceeded the 5 per cent threshold during his accumulation of stock in 2022.

According to the regulator, the delay enabled him to continue purchasing shares at lower prices.

Following an analysis of Musk’s trading activity, the SEC concluded that the late disclosure of his holdings allowed him to avoid paying over US$150 million, while shareholders who sold stock during that period suffered financial losses.

The agency had initially sought to compel Musk to disgorge those gains in full, alongside an additional civil penalty. His lawyers said the SEC had previously demanded as much as US$200 million in earlier settlement discussions.

Musk’s attempt in February to have the lawsuit dismissed was unsuccessful. His legal team argued that the SEC had enforced securities laws selectively and that the case infringed his right to free speech. However, Judge Sparkle Sooknanan found no sufficient grounds to throw out the suit.

Musk began acquiring Twitter shares on the open market in early 2022, with the SEC stating that his stake crossed the 5 per cent threshold on March 14 of that year.

Under US regulations, he was required to disclose this within 10 calendar days. Instead, he made the disclosure on April 4 — 11 days late — by which time his stake had reached 9 per cent. The SEC said Twitter’s share price subsequently surged by 27 per cent following the announcement.

Musk ultimately completed the US$44 billion acquisition of Twitter in October 2022, financing much of the deal through sales of shares in Tesla, the electric carmaker he leads, as well as approximately US$12 billion in loans. - May 5, 2026