Washington The US Securities and Exchange Commission has scrutinized the entry of tech billionaire Elon Musk as a major investor on Twitter. The authority asked the Tesla boss on April 4 for information about compliance with regulations when disclosing his Twitter involvement. This emerges from a letter to Musk that the regulator published on Friday. Musk is accused of market manipulation and securities fraud over late SEC filings by shareholders. So far he has not commented himself.
In the letter, the SEC warns Musk that he may not have properly disclosed his investment on Twitter. Musk announced on April 4 that he owned more than nine percent of the company. In the US, investors are required to report holdings of more than 5 percent within ten days. Musk apparently failed to do so. Twitter shareholders have already sued him for this. They argue that by flouting the rule, he was able to keep buying shares cheaply and increasing his holdings.
The letter from the SEC not only addresses the reporting deadlines, but also the nature of the disclosure. Musk initially submitted a form that classified him as a so-called passive investor who has no influence on company management. But Musk got involved in management issues from the start and then quickly launched a takeover plan. Twitter ultimately agreed. However, it is currently uncertain whether the deal will succeed. Musk later changed the form to one for active investors.
Musk has been at odds with the SEC for years. The authority had sued him in 2018 for misleading tweets. Among other things, Musk had tweeted that he wanted to take Tesla private and that he had secured the financing for it. However, according to the SEC, that was not the truth. In a comparison, the Tesla boss agreed to a fine. He also had to temporarily give up the chairmanship of the board of directors and since then have had certain stock market-related tweets checked by a lawyer. But Musk then taunted the SEC and happily continued to tweet.
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