Billionaire Elon Musk is facing intense pressure to resolve a long-standing dispute with the Securities and Exchange Commission (SEC) over his acquisition of Twitter, now rebranded as X. The controversy has been brewing since Musk’s $44 billion buyout in 2022.
Dispute Overview
The SEC has been investigating Musk’s handling of his Twitter acquisition, specifically focusing on his sale of Tesla stock and increase in Twitter stake prior to the leveraged buyout announcement in 2022. The regulator has been probing potential securities fraud committed by Musk during this time.
Musk’s Response
Musk’s lawyer, Alex Spiro, has countered the SEC’s allegations, claiming that the regulator has been subjecting Musk to “years of harassment.” Spiro also questioned whether the investigation was directed by the White House or the SEC. Musk has personally expressed frustration with the SEC, addressing Chairman Gary Gensler directly and asking, “How could you do this to me?”
SEC’s Investigation
The SEC has reopened a separate investigation into Neuralink, another Musk-owned company. Musk’s lawyer has expressed concern over the regulator’s actions, stating that the demand for a settlement follows a “multi-year investigation” and over “six years of harassment” of Musk by the SEC.
Settlement Offer
The SEC has extended its original 48-hour deadline for Musk’s response to Monday, December 16. If Musk fails to reach a settlement agreement, he may face charges and a potential Wells notice.
History with the SEC
Musk has clashed with the SEC on multiple occasions in the past. In 2018, the SEC accused Musk of securities fraud related to a tweet about taking Tesla private. Musk and Tesla each paid $20 million in fines as part of a settlement.
Trump’s Involvement
Musk has publicly endorsed Donald Trump in the 2024 election and financially supported his campaign. Trump is expected to take office in January, with SEC Chairman Gary Gensler announcing his intention to step down. Musk has been announced as the head of the Department of Government Efficiency, which will focus on reducing government spending and potentially shape new regulations.
Market Impact
Tesla’s stock price has seen significant gains since the 2024 election, rising 72% year-to-date. The stock is currently trading at $426.52, nearing its 52-week high.
What’s Next
The outcome of Musk’s dispute with the SEC remains uncertain, but it is clear that the stakes are high for both parties. With the changing of the guard in the US government and Musk’s growing influence, the situation is being closely watched by investors and the business community alike.