Musk Seeks Dismissal of SEC Civil Case, Claims Agency Overreach

Elon Musk has asked a federal judge to dismiss the U.S. Securities and Exchange Commission’s (SEC) civil lawsuit against him over his 2022 acquisition of Twitter stock, arguing that the regulator’s case regarding a delayed disclosure is legally baseless.

In a motion filed Thursday, Musk contended that the SEC overstepped by suing him for allegedly exceeding the 10-day reporting window for a stake over 5% — a delay the agency claims allowed him to purchase additional shares at lower prices before publicly disclosing his holdings.

The SEC’s “selective enforcement” of its securities laws “reveals an agency targeting an individual for his protected criticism of government overreach,” Musk stated.

“There is no ongoing violation. There is no intent. There is no harm,” he added. “Simply put, this action is a waste of this court’s time and taxpayer resources.”

The lawsuit, filed in Washington, D.C., examines whether Musk’s filings in March and April 2022 complied with the Securities Exchange Act.

The SEC’s January complaint argued that Musk’s late disclosure saved him at least $150 million and accused him of submitting a form intended for passive investors, despite actively engaging with Twitter’s management.

In October 2022, Musk purchased Twitter for $44 billion and rebranded it as X. Additionally, a federal judge in March allowed a shareholder lawsuit to move forward, alleging Musk’s delayed disclosure defrauded former Twitter investors, highlighting ongoing legal scrutiny of the acquisition.

This case echoes Musk’s prior clashes with regulators, including the 2018 “funding secured” incident, when he tweeted about taking Tesla private at $420 per share, causing market disruption. The SEC sued Musk for securities fraud, leading to a settlement in which he resigned as Tesla’s chairman and paid a $20 million fine.

In a Friday court filing, the SEC stated that Musk’s intent was irrelevant and that he should be held accountable for violating “important public reporting requirements under the federal securities laws.”