Elon Musk’s Lawyer Labels SEC Lawsuit ‘Harassment’ Over Late Filing

• The U.S. Securities and Exchange Commission has filed a lawsuit against Elon Musk, claiming improper disclosure of his stake in Twitter before he purchased the social media platform.
• Musk’s lawyer has slammed the lawsuit as “harassment” against the billionaire.
• Tensions between the world’s richest man and the agency have been strained over the past few years.

The U.S. securities regulator sued Elon Musk on Tuesday, Jan. 15, accusing the billionaire of withholding information about his significant stake in Twitter, the giant social media platform he later acquired.

Musk’s lawyer has retaliated against the agency, claiming the action was “an admission by the SEC that they cannot bring an actual case” and “harassment.”

The SEC Sues Musk

The U.S. Securities and Exchange Commission (SEC) has accused the world’s richest man of waiting 11 days to disclose his Twitter stockholdings—saving himself over $150 million.

According to SEC rules, all investors must disclose within 10 calendar days when they cross a 5% ownership.

Over the 11 days, Musk allegedly bought another $500 million worth of shares in Twitter.

However, the SEC said that because the information was not disclosed in a timely manner, the billionaire was able to underpay for the shares by at least $150 million.

The SEC claims that Musk’s late disclosures affected other company shareholders, who suffered “substantial economic harm.”

“As alleged, because Musk failed to timely file a beneficial ownership report with the SEC, he was able to make these purchases of Twitter common stock at artificially low prices from the unsuspecting public, who had not yet priced in the undisclosed material information of Musk’s beneficial ownership of more than five percent of Twitter common stock and investment purpose,” the SEC said in a statement .

The SEC is seeking Musk to pay a civil fine and return the artificial profits he earned at the time.

Musk’s Lawyer Claims Harassment

On Tuesday, Musk’s lawyer, Alex Spiro, fired back against the SEC, claiming Musk had done nothing wrong.

In a statement received by Fortune , Spiro said, “Everyone sees this sham for what it is.”

“The SEC’s multi-year campaign of harassment against Mr. Musk culminated in the filing of a single-count ticky tak complaint against Mr. Musk under Section 13(d) for an alleged administrative failure to file a single form—an offense that, even if proven, carries a nominal penalty,” Spiro added.

The lawsuit comes after weeks of Musk using X, formerly Twitter, to taunt the SEC over the potential of filing a lawsuit.

Following the complaint, Musk took to X to call the agency a “totally broken organization.”

“They spend their time on s*** like this when there are so many actual crimes that go unpunished,” Musk wrote.

Musk vs. SEC

Musk has been locked in a tense relationship with the SEC over the past few years, culminating in several high-profile legal confrontations.

The recent lawsuit is the third time the SEC has gone to court with Musk, with the initial legal clash occurring in 2018.

The world’s richest man was accused of making misleading statements about taking Tesla private, leading to market disruption and investor harm.

Musk was forced to pay a $20 million fine and step down as chairman at Tesla.

Since this first settlement, tensions between the agency and the world’s richest man have only grown.

In 2019, the SEC sought to hold Musk in contempt of court, alleging he violated his agreements a year prior.

Under the 2018 agreement, Musk was required to have his public statements about Tesla reviewed and approved by company lawyers before sharing them on platforms like Twitter.

However, in February 2019, Musk tweeted that Tesla would produce “around 500k cars in 2019,” which the SEC argued was a statement that had not been pre-approved.

This tweet, the SEC claimed, misled investors and breached the oversight agreement.

Presidential Inauguration

The SEC’s latest lawsuit against Musk comes just six days before Trump’s Jan. 20 inauguration.

Musk and Trump, now close allies, have been persistent critics of the SEC and have regularly communicated this on their respective platforms.

When the President-elect takes office, SEC Chair Gary Gensler will step down, and Paul Atkins, appointed by Trump to replace him, is expected to overhaul many of Gensler’s rules.