Elon Musk is being sued for failing to disclose his purchase of more than 5% of Twitter stock in a timely fashion.
The world’s richest man bought the stock in March 2022 and the complaint by the US Securities and Exchange Commission (SEC) said the delay allowed him to continue buying Twitter stock at artificially low prices.
In papers filed in Washington DC federal court, the SEC said the move allowed Mr Musk to underpay by at least $150m (£123m).
The commission wants Mr Musk to pay a civil fine and give up profits he was not entitled to.
In response to the lawsuit a lawyer for the multi-billionaire said: “Mr Musk has done nothing wrong and everyone sees this sham for what it is.”
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An SEC rule requires investors to disclose within 10 calendar days when they cross a 5% ownership threshold.
The SEC said Mr Musk did not disclose his state until 4 April 2022, 11 days after the deadline – by which point he owned more than 9% of Twitter’s shares.
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Twitter’s share price rose by more than 27% following Mr Musk’s disclosure, the SEC added.
Mr Musk later purchased Twitter for $44bn (£36bn) in October 2022 and renamed the social media site X.
Read more: Majority of public says Musk having a negative impact on British politics
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Since the election of Donald Trump, Mr Musk has been put in charge of leading a newly created Department of Government Efficiency (DOGE) alongside former Republican presidential candidate Vivek Ramaswamy.
The president-elect said the department would work to reduce government bureaucracy, slash excess regulations, cut wasteful expenditures and restructure federal agencies.
