Elon Musk has agreed to pay $1.5 million to settle a federal lawsuit accusing him of violating stock market rules during his secret accumulation of Twitter shares ahead of his $44 billion takeover in 2022. The deal, filed in Washington federal court, requires a judge's approval.
The Securities and Exchange Commission (SEC) alleged Musk missed a statutory deadline by 11 days when he crossed the 5% ownership threshold in early 2022. The delay allowed him to buy additional shares at artificially low prices, saving an estimated $150 million at the expense of other shareholders.
Musk's attorney, Alex Spiro, framed the outcome as a vindication, emphasizing that his client admitted no wrongdoing. The trust vehicle agreed only to the fine and a promise to comply in the future. If the judge approves, Musk will be dropped from the case.
This settlement comes after a separate jury trial in California found Musk misled Twitter investors during the takeover, with potential damages near $2 billion. It marks Musk's second settlement with the SEC; he paid $20 million in 2018 over misleading tweets about taking Tesla private.