In a recent filing with a federal court, Elon Musk’s legal team requested the dismissal of a lawsuit filed by the SEC, calling it an overreach and accusing the agency of targeting the billionaire.
The lawsuit, which dates back to January 14, 2023—just six days after Donald Trump’s election—alleges that Musk violated federal securities law by missing the 10-day deadline to publicly disclose his intention to purchase a 5% stake in Twitter. If the SEC prevails, Musk could face a civil penalty and be required to surrender any profits resulting from the alleged violation.
Under the rule, investors must disclose when they cross the 5% ownership threshold within 10 calendar days. In Musk’s case, the disclosure should have been made by March 24, 2022. However, he filed 11 days late.
In Thursday’s filing, Musk’s attorneys, cited by Reuters, argued that the billionaire had paused purchases of Twitter shares and submitted his disclosure one business day after his wealth manager consulted securities disclosure counsel on the requirements.
The SEC, however, alleged that Musk acquired over $500 million worth of Twitter shares at low prices before publicly revealing his holdings on April 4, 2022—by which point his stake had risen to 9.2%.
Musk’s lawyers contend that the lawsuit “reveals an agency targeting an individual for his protected criticism of government overreach” and noted that the alleged error was “fully corrected” once discovered. The SEC has not yet commented on the filing.
Meanwhile, Musk is also facing a separate legal challenge. Earlier this month, an Ethereum-based gaming network called xAI by Ex Populus filed a lawsuit against him for trademark infringement, citing the similarity to the name of Musk’s AI company, xAI.
Musk’s cryptocurrency ambitions via X
Just days after the SEC lawsuit, Musk announced plans to transform Twitter—rebranded as X in October 2022—into a so-called “super app” featuring in-app investment and trading services.
According to X CEO Linda Yaccarino, the platform is preparing to launch integrated financial services, allowing users not only to make payments but also to invest and trade assets.
“A whole commerce ecosystem and a financial ecosystem is going to emerge on the platform that does not exist today,” Yaccarino said.
Musk has also proposed a peer-to-peer digital wallet, X Money, which could integrate with payment giant Visa. Other potential features of the “super app” include collaborations with platforms like Polymarket and Vine.
In a recent filing with a federal court, Elon Musk’s legal team requested the dismissal of a lawsuit filed by the SEC, calling it an overreach and accusing the agency of targeting the billionaire.
The lawsuit, which dates back to January 14, 2023—just six days after Donald Trump’s election—alleges that Musk violated federal securities law by missing the 10-day deadline to publicly disclose his intention to purchase a 5% stake in Twitter. If the SEC prevails, Musk could face a civil penalty and be required to surrender any profits resulting from the alleged violation.
Under the rule, investors must disclose when they cross the 5% ownership threshold within 10 calendar days. In Musk’s case, the disclosure should have been made by March 24, 2022. However, he filed 11 days late.
In Thursday’s filing, Musk’s attorneys, cited by Reuters, argued that the billionaire had paused purchases of Twitter shares and submitted his disclosure one business day after his wealth manager consulted securities disclosure counsel on the requirements.
The SEC, however, alleged that Musk acquired over $500 million worth of Twitter shares at low prices before publicly revealing his holdings on April 4, 2022—by which point his stake had risen to 9.2%.
Musk’s lawyers contend that the lawsuit “reveals an agency targeting an individual for his protected criticism of government overreach” and noted that the alleged error was “fully corrected” once discovered. The SEC has not yet commented on the filing.
Meanwhile, Musk is also facing a separate legal challenge. Earlier this month, an Ethereum-based gaming network called xAI by Ex Populus filed a lawsuit against him for trademark infringement, citing the similarity to the name of Musk’s AI company, xAI.
Musk’s cryptocurrency ambitions via X
Just days after the SEC lawsuit, Musk announced plans to transform Twitter—rebranded as X in October 2022—into a so-called “super app” featuring in-app investment and trading services.
According to X CEO Linda Yaccarino, the platform is preparing to launch integrated financial services, allowing users not only to make payments but also to invest and trade assets.
“A whole commerce ecosystem and a financial ecosystem is going to emerge on the platform that does not exist today,” Yaccarino said.
Musk has also proposed a peer-to-peer digital wallet, X Money, which could integrate with payment giant Visa. Other potential features of the “super app” include collaborations with platforms like Polymarket and Vine.
