Elon Musk is facing a lawsuit from the US Securities and Exchange Commission (SEC) for allegedly failing to disclose his stake in Twitter within the required time frame before purchasing the social media platform. According to the SEC, Musk did not report exceeding 5 percent ownership of Twitter stock within the mandatory 10-day period in March 2022.

The SEC said that because Musk failed to timely disclose his beneficial ownership, “he was able to make these purchases from the unsuspecting public at artificially low prices, which still left Musk with more than five percent of his beneficial ownership.” The undisclosed content did not reflect Twitter’s common stock and investment objectives. However, Musk’s lawyer has a different story to tell.

Elon Musk sued over late disclosure of Twitter ownership: The story in 5 points

– Billionaire Elon Musk takes over Twitter in October 2022. But before he could fully take over the social media platform, he started accumulating Twitter shares in early 2022. In doing so, Musk had surpassed 5 percent ownership by March that year. At this point, the law required him to disclose his ownership, but he failed to do so.

– Since he did not disclose his stake, Musk was able to pay “at least $150 million” for the shares he purchased. Musk’s failure to timely disclose his beneficial ownership allowed him to purchase shares from the public at artificially low prices. The securities regulator said these prices do not include Musk’s ownership of more than five percent of Twitter’s common stock or material information about his investment intentions, which has not yet been disclosed. Musk eventually bought Twitter for $44 billion in October 2022 and renamed it X.

– Musk delayed disclosing his acquisition until April 4, 11 days before the required reporting deadline. In a complaint filed in federal court in Washington, DC, the SEC accused Musk of violating federal securities laws by failing to disclose his initial purchase of 5 percent of Twitter’s common shares within a mandated deadline.

– Musk’s lawyer Alex Spiro called the SEC lawsuit in an email the culmination of the regulator’s “multi-year campaign of harassment” against his client. He said, “Today’s action is an admission by the SEC that they cannot bring a genuine case.” “Mr. Musk has done nothing wrong and everyone sees this sham for what it is.” He further said that the suit only addresses “alleged administrative failure to file a single form – an offense that carries a nominal penalty even if proven.”

– The SEC is investigating the CEOs of Tesla and SpaceX in connection with their acquisition of the social media platform. In December, Musk revealed on social media that the agency had requested him to pay an unspecified fine to settle charges related to his purchase of Twitter shares, according to a letter from his lawyer Spiro. Additionally, Musk faced problems with the commission last year after failing to appear to testify during the investigation.