Elon Musk faces SEC lawsuit over Twitter ownership disclosure.

• On Tuesday, the SEC accused Elon Musk of breaking securities law by purchasing Twitter shares at "unfairly low prices."
• In 2022, Musk acquired Twitter for approximately $44 billion and later renamed it X.

On Tuesday, the SEC accused Elon Musk of securities fraud in 2022 for not disclosing his ownership in Twitter and purchasing shares at "artificially low prices."

Elon Musk, CEO of both Tesla and SpaceX, bought Twitter for $44 billion and later renamed it X. Prior to the acquisition, he held a stake in the company greater than 5%, necessitating public disclosure of his holding.

The SEC alleges that Musk failed to disclose material information, enabling him to purchase shares at a lower price than he would have if the information had been disclosed.

The SEC had been investigating whether Musk or anyone working with him committed securities fraud in 2022, as he sold shares in Tesla and increased his stake in Twitter ahead of his leveraged buyout. Musk stated in a post on X last month that the SEC issued a "settlement demand," pressuring him to agree to a deal including a fine within 48 hours or face charges regarding the purchase of shares.

Alex Spiro, Musk's lawyer, stated in an email that the SEC's action is an admission that they cannot bring a legitimate case. He added that Musk has not committed any wrongdoing and called the lawsuit a "sham" and the result of a "multi-year campaign of harassment," culminating in a "single-count ticky tak complaint."

In a week, Musk will have a significant role in government as President-elect Trump's second term begins, and he will lead an advisory group that aims to reduce regulations affecting his businesses.

In July, Trump threatened to dismiss SEC chairman Gary Gensler. However, following his election victory, Gensler revealed that he would be stepping down from his position.

The Oklahoma Firefighters Pension and Retirement System accused Musk of hiding his investments in Twitter and intending to buy the company in a separate civil lawsuit. The pension fund's lawyers claimed that Musk's failure to disclose his investments had influenced other shareholders' decisions and put them at a disadvantage.

In March 2022, Musk exceeded the 5% ownership limit and was obligated to disclose his holdings by March 24, as per SEC regulations.

"On April 4, 2022, eleven days after a report was due, Musk publicly disclosed his beneficial ownership in a report with the SEC, stating that he had acquired over nine percent of Twitter's outstanding stock. As a result, Twitter's stock price increased more than 27% over its previous day's closing price."

The SEC claims that Musk bought more Twitter shares for over $500 million during the time between the required disclosure and the day of his actual filing, which allowed him to purchase stock from the "unsuspecting public at artificially low prices." He allegedly underpaid Twitter shareholders by over $150 million during that period.

This story is developing.