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Elon Musk's delay in disclosing Twitter stake triggers SEC probe

The Wall Street Journal reported on Wednesday that the SEC is investigating Musk's submission of a form that investors must file when they accumulate more than 5 per cent of a company

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Elon Musk | US SEC | Twitter

Bloomberg 

If he should become Twitter’s owner, Musk said he would scrap the current program of content monitoring and censoring
Musk disclosed on April 4 that he acquired more than 9% in the company.

Elon Musk’s bid to buy Inc. is facing more scrutiny in Washington following a report that the US Securities and Exchange Commission is probing whether he broke rules last month when disclosing a large stake in the social media platform.

The Wall Street Journal reported on Wednesday that the SEC is investigating Musk’s submission of a form that investors must file when they accumulate more than 5 per cent of a company. The Federal Trade Commission is also reviewing the bid by the world’s richest person to take private.

Musk disclosed on April 4 that he acquired more than 9% in the company, a week later than regulations allow and by using a filing typically reserved for passive investors. He has since embarked on a highly-public takeover bid.

An SEC spokesman declined to comment on the Journal report. Alex Spiro, a lawyer for Musk, didn’t immediately respond to a request for comment.

Inquiries by the SEC don’t always lead to the regulator taking action.

SEC Chair Gary Gensler has been pressing to tighten rules for how investors must disclose they’ve taken a major stake in a company. He’s called for more transparency, and earlier this year proposed cutting the maximum time that an investor has to reveal they’d taken a significant position.

Over the years the SEC has repeatedly sparred with the Tesla Inc. chief executive officer and was already investigating whether he and his brother violated insider trading rules when selling shares in the electric automaker late last year – something Musk has denied. He’s also fighting the regulator in court over fallout from his infamous tweet that he had secured funding to take Tesla private.

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First Published: Fri, May 13 2022. 01:35 IST
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