San Francisco: The US Securities and Exchange Commission (SEC) is now after Tesla CEO Elon Musk over late disclosure about his substantial stake in Twitter.
According to reports, the SEC told Musk that he “does not appear” to have disclosed his acquisition of Twitter shares within the commission’s required 10-day window.
The SEC said that Musk “likely used the wrong form when he eventually disclosed his stake”, reports The Verge.
The letter, filed last month and made public now, asked clarifications from Musk on “why he chose to use a form meant for passive investors and whether the agency is wrong about his filing coming in late”.
“Please advise us why the Schedule 13G does not appear to have been made within the required 10 days from the date of acquisition as required by Rule 13d-1(c), the rule upon which you represented that you relied to make the submission,” the SEC asked Musk.
Twitter shares surged nearly 28 per cent after regulatory filings in the US revealed that the Tesla and SpaceX CEO has a 9.2 per cent passive stake in Parag Agrawal-run platform.
According to a regulatory filing in the US SEC, the world’s richest man bought nearly 73.5 million shares in the micro-blogging platform.
Musk has put the $44 billion Twitter buyout on hold over the presence of fake/spam accounts on the platform.
Musk recently tried to escape a settlement he reached with the US SEC over his “funding secured” tweet in 2018, where he posted about taking Tesla private.
Meanwhile, a Twitter shareholder has also sued Musk, alleging that the Tesla CEO actively manipulated the company’s stock for personal gain.
The lawsuit alleged that Musk proceeded to make statements, send tweets, and engage in conduct designed to create doubt about the deal and “drive Twitter’s stock down substantially in order to create leverage that Musk hoped to use to either back out of the purchase or re-negotiate the buyout price”.
The proposed class-action lawsuit was filed on behalf of Twitter shareholders in federal district court in San Francisco.