A federal judge on Wednesday approved the U.S. Securities and Exchange Commission’s settlement with Elon Musk over his purchase of Twitter shares, despite expressing “significant misgivings” about the agreement and the “red flags” it raised.
The settlement requires a trust under Musk’s name to pay $1.5 million to settle SEC allegations that he delayed disclosing his early Twitter share purchases by 11 days in March and April 2022.
Musk stated that the delay was unintentional. He ultimately purchased Twitter for $44 billion in October 2022 and renamed it X.
According to the SEC, the delayed disclosure allowed Musk to buy at low prices before investors realized, leading to $150 million of ill-gotten gains.
U.S. District Judge Sparkle Sooknanan in Washington, D.C., stated that her role in evaluating whether the settlement met basic fairness and reasonableness standards was limited. She emphasized that it is the public’s responsibility to determine at the ballot box whether the SEC has done enough to hold Musk accountable.
The final approval ends more than seven years of tense battles between Musk and the regulator, beginning in September 2018 when the SEC charged him with securities fraud for tweeting he had “secured” funding to potentially take Tesla private.
By CEO NA Editorial Staff
