Musk’s trust agrees to pay $1.5M to end SEC lawsuit over late Twitter stake disclosure

A trust linked to billionaire Elon Musk has agreed to pay $1.5 million to resolve a US Securities and Exchange Commission (SEC) lawsuit over the delayed disclosure of a major stake in Twitter, now known as X.

The commission said in a statement on Monday that it had amended its complaint to add the “Elon Musk Revocable Trust Dated July 22, 2003” as a defendant in the case.

The amended complaint alleges that the defendants failed to file a beneficial ownership report on time after the trust acquired more than 5% of Twitter’s common stock.

The commission also said it had asked a federal court to approve a consent final judgment against the trust.

Under the proposed settlement, the trust agreed to pay a $1.5 million civil penalty without admitting or denying the allegations. The judgment would also permanently bar the trust from violating federal beneficial ownership reporting rules.

The settlement still requires court approval.

If approved, the SEC said it would dismiss Musk in his personal capacity, bringing the case to a close.

The commission filed the lawsuit in January last year, alleging that Musk failed to promptly disclose in March 2022 that he had crossed the 5% ownership threshold in Twitter.

The regulator claimed the delay allowed Musk to keep buying Twitter shares at artificially low prices, resulting in an alleged underpayment of at least $150 million.

The SEC also alleged that investors who sold Twitter shares during the delayed disclosure period did so at artificially low prices and suffered significant economic losses.