The Securities and Exchange Commission (SEC) on Tuesday took one more shot at TESLA and SpaceX CEO Elon Musk before President-elect Donald Trump begins his second term on Monday, accusing the multibillionaire of committing securities fraud in 2022 by acquiring Twitter at “artificially low” prices.
Advertisement
According to the SEC’s civil suit, filed in U.S. District Court in Washington, D.C., Musk was more than 10 days late in reporting requiring material information, “allowing him to underpay by at least $150 million for shares he purchased after his financial beneficial ownership report was due.”
Prior to the acquisition, the world’s richest man had acquired a position in the company of greater than 5 percent, which required disclosing his holdings to the public within 10 calendar days of reaching the threshold. Musk publicly disclosed his holdings on the 11th day after the mandatory guidelines.
Can you spell “petty witch hunt”?
On the day Musk filed, Twitter stock jumped 27 percent. The next day, he disclosed that he had joined Twitter’s board of directors and owned more than 9 percent of the social media company’s shares. Several days later, shortly before Musk was scheduled to join the board, he changed his mind and launched public attacks against the company. Let’s revisit that before we continue.
Here’s how Whole Mars Catalog, which covers tech, securities markets, AI, new energy, and autonomous electric vehicles, went bottom line on the Democrats’ ridiculously failed strategy against Musk:
Elon: I want to buy Twitter.
Democrats: You can’t have it.
Elon: I’ll pay you guys a lot.
Democrats: Okay fine.
Elon: Wait most of these users are bots, I can’t pay this much. This is insanely overpriced.
Democrats: No, you said you were going to buy it. You HAVE to buy it.
Elon: Alright fine i’ll buy it.
Democrats: HAHA! You overpaid for Twitter! It’s worth much less now! Loser!
Elon: Yeah, I definitely overpaid for it.
Democrats: We’re suing you for turning in your disclosure form a little late, allow[ing] you to buy Twitter at a lower price
Elon: That was the lower price?
Advertisement
Exactly.
Here’s more:
Musk is just [four days away as I write] having unparalleled influence in the White House, as President-elect Donald Trump’s second term begins on Jan. 20. Musk, who was a major financial backer of Trump in the latter stages of the campaign, is poised to lead an advisory group that will focus in part on reducing regulations, including those that affect Musk’s various companies.
Along with 2024 Republican presidential primary candidate Vivek Ramaswamy, Musk will head Trump’s newly created Department of Government Efficiency (DOGE).
Do we smell a rat here?
Having spent nearly 30 years in the securities market, I have a few relevant thoughts. Let’s start with the 27 percent jump in Twitter stock after Musk first announced he had joined Twitter’s board of directors.
First, the equities (stock) market is generally a leading indicator, meaning investors purchase stock in anticipation of a rising market. In this case, an expected increase in the value of Twitter stock after Musk made his announcement, whereas the fixed-investment (bond) market is a following indicator. Investors who thought Musk would put an end to Twitter’s blatant censorship of conservative content and restore free speech on the platform were encouraged to jump in, in anticipation.
Advertisement
Second, Musk’s $150 million “underpayment,” if even true, represented an infinitesimal percentage of his estimated net worth of $426 billion as of January 2025, according to the Bloomberg Billionaires Index.
Here’s the salient point:
Why would Musk risk giving the Biden administration’s SEC another (fake) opportunity to hound him? He wouldn’t.
In response to the SEC suit, Musk posted on X:
Totally broken organization.
They spend their time on s*** like this when there are so many actual crimes that go unpunished.
Ahh, but Elon, you’re in cahoots with Donald Trump — the Devil’s spawn — to slash government inefficiency, a direct threat to federal government bureaucrats, my man.
Musk’s lawyer, Alex Spiro, said in a Tuesday statement that the SEC’s suit is an admission that “they cannot bring an actual case.” Spiro added that Musk “has done nothing wrong” and called the suit a “sham” and the result of a “multi-year campaign of harassment,” culminating in a “single-count ticky-tak complaint.”
ALSO READ:
Elon Musk Tells the SEC What We All Wish We Could Tell the Federal Bureaucracy
Elon Posts Troubling Letter From His Attorney Regarding SEC and Threatened ‘Charges’
Advertisement
Meanwhile, soon-to-be former President Joe Biden’s worthless son, Hunter Biden, enjoys a full and unconditional pardon by daddy for failing to pay at least $1.4 million in federal taxes and other charges. Go figure.