Elon Musk has agreed to pay a $1.5 billion fine to settle allegations by the US Securities and Exchange Commission (SEC) that he cheated Twitter shareholders out of millions of dollars in 2022 by failing to properly disclose his growing stake in the social media company, according to a recent filing.
Settlement Details
As reported by Bloomberg, the settlement is now subject to court approval. This agreement brings an end to more than seven years of legal battles between Musk and the regulator, which originally began in September 2018.
SEC Allegations Against Musk
In January 2025, the SEC claimed that Musk's 11-day delay in revealing his initial 5% Twitter stake in late March and early April 2022 allowed him to purchase more than $500 million worth of shares at artificially low prices. Musk eventually disclosed a 9.2% stake in Twitter later on.
The SEC argued that Musk should pay a civil fine and repay the $150 million he allegedly saved at the expense of unsuspecting investors. Musk, however, called the delay inadvertent and accused the SEC of violating his free speech rights by targeting him.
Not the First Legal Issue
The US market regulator had previously charged the world's richest man with securities fraud for sharing an online post stating he had "secured" funding to potentially take his electric car company Tesla private. According to a Reuters report, Musk settled that case by paying a $20 million civil fine, agreeing to let Tesla lawyers review some Twitter posts in advance, and relinquishing his role as Tesla's chairman.
"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.
$1.5 Billion Fine Termed 'Modest'
The Reuters report cited Robert Frenchman, a partner at the Dynamis law firm in New York, who said the $1.5 billion penalty was a "modest sum for the richest person on the planet" but could deter similar violations by others. "That is a statement to the market that the rules apply to everyone, even to Elon Musk," he said.
"It's an embarrassing day for the SEC," said Amanda Fischer, former chief of staff to Gary Gensler, who chaired the regulator during the Biden administration. She said the settlement "should cause the public to question whether the SEC is protecting White House insiders at the expense of ordinary investors."
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