Musk and SEC Settle Twitter Lawsuit for 1.5 Million Dollars
Elon Musk and the SEC proposed to settle a lawsuit for $1.5 million. The SEC accused Musk of cheating investors out of $150 million.
This happened during his buyout of Twitter. The SEC said Musk waited 11 days too long to reveal he owned 5% of Twitter shares.
That delay let him buy over $500 million in shares at lower prices. Prices rose after he made his ownership public.
Under the deal Musk will not repay the $150 million. A trust in his name will pay the $1.5 million penalty.
Musk does not admit any wrongdoing. Reports say this is the largest SEC penalty ever for this type of violation. A judge still needs to approve the settlement.
Klear Note — The SEC is the US agency that enforces stock market rules. When someone buys company shares, they must tell the public quickly if they own 5% or more.
Key Terms 4
- SEC US agency that enforces rules for stock markets and investors
- settlement An agreement to end a legal case without a full trial
- disclosure Legally required public announcement about owning shares in a company
- trust A legal arrangement where assets are held and managed on someone's behalf