US Securities Exchange Commission, Musk in talks to settle lawsuit over Twitter disclosures

ISTANBUL

The US Securities and Exchange Commission (SEC) and Elon Musk are working toward a potential settlement in a lawsuit over the late disclosure of stock purchases in Twitter, the social media company now known as X.

In a filing submitted on Tuesday to the district court in Washington by the SEC and Musk’s lawyers, the parties said they had met and held consultations.

The filing said the sides were engaged in discussions over a “potential resolution” that could make further court proceedings unnecessary.

They asked the court to extend the deadline for submitting a joint status report by two weeks, to April 1, in order to facilitate the ongoing talks.

The SEC filed the lawsuit against Musk last January over his purchases of shares in Twitter, the platform now known as X and owned by the tech billionaire.

The lawsuit alleged that Musk violated federal securities laws by failing to timely file a report with the SEC disclosing that he had acquired more than 5% of Twitter’s shares in March 2022.

The SEC argued that this allowed Musk to continue buying shares at lower prices, enabling him to underpay by at least $150 million.

It also said that during the period in which Musk delayed the disclosure, investors sold Twitter shares at artificially low prices and suffered significant economic harm. The SEC asked the court to order Musk to pay a civil penalty and disgorge the alleged ill-gotten gains from his stock purchases.