The U.S. Securities and Exchange Commission (SEC) has ended a lawsuit against Elon Musk that accused him of concealing information about his stock purchases in Twitter (now X). Musk agreed to pay $1.5 million to settle the case.

According to The New York Times, the core of the SEC’s case was whether Musk complied with disclosure obligations required by securities law during his 2022 Twitter share acquisition. Under federal securities law, when an investor’s stake in a publicly traded company exceeds 5%, they must file a Schedule 13D with the SEC within 10 days, disclosing their holdings and intentions.

The SEC had previously alleged that Musk failed to disclose relevant information within the required timeframe after crossing the 5% ownership threshold, preventing the market and other investors from timely understanding his large-scale acquisition. This delayed disclosure may have affected Twitter’s stock price, putting other investors at a disadvantage.

Notably, the SEC has recently shown a softer stance on lawsuits against large corporations, gradually reducing its enforcement actions against major companies. This settlement is seen as part of that trend.

Musk completed his acquisition of Twitter in 2022 for approximately $44 billion, one of the largest mergers in social media history. After the acquisition, he undertook massive restructuring of the platform, including layoffs, rebranding to X, and launching several controversial monetization policies.

The settlement does not mean Musk admitted wrongdoing, but the $1.5 million payment indicates both parties found an acceptable resolution. The SEC typically settles without admitting or denying the allegations.

Source: The New York Times