Musk To Pay US$1.5 Mln To Settle Twitter Takeover Case

WASHINGTON, May 5 (Bernama-dpa) -- Tech billionaire Elon Musk is set to end a lawsuit by the US Securities and Exchange Commission (SEC) over his share purchases during his takeover of Twitter with a payment of US$1.5 million, reported German news agency dpa.

Musk and the SEC agreed on the amount in a settlement disclosed on Monday that will be submitted to the assigned judge for approval. The penalty is only a fraction of the US$150 million the SEC alleged Musk saved by violating disclosure rules.

In the lawsuit, filed in early 2025, the SEC accused Musk of failing to disclose in time that his stake in Twitter had crossed the 5 per cent threshold while he was buying shares in the online platform in 2022. That allowed him to buy more shares at lower prices, the regulator said.

The SEC analysed Musk's purchases and concluded that the delayed mandatory disclosure had saved him more than US$150 million. Shareholders who sold him their shares during that period suffered financial harm, according to the regulator.

The SEC had initially sought to force Musk to repay that amount and pay an additional penalty. According to Musk's lawyers, the agency had demanded US$200 million in an earlier settlement offer.

Musk failed in February in an attempt to have the lawsuit dismissed. His lawyers had argued that the SEC had applied the law selectively and that the lawsuit violated his right to free speech. Judge Sparkle Sooknanan, however, saw no reason to dismiss the case.

The tech billionaire began buying Twitter shares on the market in early 2022. In its lawsuit, the SEC said his stake reached 5 per cent on March 14, 2022.

Under US rules, Musk should have made that public within 10 calendar days. But he only disclosed on April 4 - 11 days too late - that he already held 9 per cent. Twitter's share price then jumped by 27 per cent, the SEC noted.

Musk spent around US$44 billion on the purchase of Twitter, which was completed in October 2022. He sold shares in Tesla, the electric carmaker he leads, to finance most of the deal. Musk also took out loans of around US$12 billion.

--BERNAMA-dpa