Elon Musk settled the US Securities and Exchange Commission’s civil lawsuit accusing the world’s richest person of waiting too long in 2022 to disclose his initial purchases of stock in Twitter, now known as X.
A trust in Musk’s name will pay a $1.5m civil penalty, without admitting wrongdoing. Musk won’t have to give up any money he allegedly saved from the delay.
The settlement was disclosed on Monday in the Washington DC federal court.
In its January 2025 lawsuit, the SEC said Musk’s 11-day delay in revealing his initial 5% Twitter stake in late March and early April 2022 let him buy more than $500min shares at artificially low prices, before he finally revealed a 9.2% stake.
The SEC had argued that Musk should pay a civil fine and repay the $150m he allegedly saved at the expense of unsuspecting investors.
Musk called the delay inadvertent and accused the SEC of violating his free speech rights by targeting him.
“Mr Musk has now been cleared of all issues related to the late filing of forms in the Twitter acquisition, as we said from the outset he would be,” his lawyer, Alex Spiro, said in a statement.
Musk completed the $44bn Twitter purchase in October 2022. He eventually folded Twitter into his artificial intelligence company, xAI, and later folded xAI into his rocket company, SpaceX. Forbes magazine says Musk is worth $789.9bn.
The SEC sued Musk six days before Joe Biden left the White House and was replaced by Donald Trump.
Paul Atkins, the SEC chair, has been refocusing the regulator’s enforcement priorities.
Both sides had disclosed on 17 March they were in talks to settle, one day after the SEC enforcement chief, Margaret Ryan, abruptly left her job after just more than six months in the position. The SEC did not immediately respond to a request for comment over the settlement.
Musk’s civil penalty is the largest in SEC history for the type of violation he was accused of, a person familiar with the settlement said. The SEC’s effort to recoup the $150m may have been tough to undertake in court, people familiar with the settlement said.
Musk has had a fraught relationship with the SEC, starting in September 2018 when the regulator charged him with securities fraud for saying on Twitter he had “secured” funding to potentially take his electric car company, Tesla, private.
He settled that case by paying a $20m civil fine, letting Tesla lawyers review some Twitter posts in advance and giving up his role as Tesla’s chair.
Monday’s settlement came three months after the US district judge Sparkle Sooknanan rejected Musk’s bid to dismiss the case.
The case is separate from a civil lawsuit in which a San Francisco jury held Musk liable on 20 March for having defrauded Twitter shareholders after announcing the buyout.
Shareholders alleged that Musk questioned whether Twitter was overrun by fake and spam accounts, known as bots, in an effort to force the social media company to renegotiate the takeover price or let him back out.
The shareholders said Musk’s comments caused Twitter’s stock price to fall, and that they suffered losses by selling shares at depressed prices. Musk is trying to overturn that verdict or get a new trial.
