Judge won’t rubber-stamp Elon Musk’s $1.5M settlement with SEC over Twitter disclosures
A Federal Judge Questions SEC’s $1.5 Million Settlement with Elon Musk Over Twitter Purchase
A federal judge on Friday declined to quickly approve the Securities and Exchange Commission’s $1.5 million settlement with Elon Musk over his purchase of Twitter, stating that she needs more information about the fairness of the agreement and how it was reached.
The SEC lawsuit accused Musk of waiting too long to disclose his 5% stake in Twitter, ultimately saving $150 million by the time he revealed a 9.2% stake in April 2022. Musk, the world’s richest person, later bought Twitter for $44 billion.
US District Judge Sparkle Sooknanan in Washington, DC, raised concerns about the fairness of the settlement to both parties, its alignment with the public interest, and the potential for improper collusion or corruption.
Both parties are required to appear in court on May 13 with a proposed timeline for filing briefs supporting the settlement.
Elon Musk’s lawyers and the SEC have not responded to requests for comment.
The SEC filed the lawsuit against Musk on Jan. 14, 2025, shortly before the end of then-President Joe Biden’s term.
Musk, a former adviser to President Trump, has alleged that the lawsuit was politically motivated and claimed that the delayed disclosure was unintentional.
The Trump administration’s enforcement activity against corporate misconduct has been limited, and current SEC Chairman Paul Atkins has been refocusing the regulator’s enforcement priorities.
Musk and the SEC initiated settlement talks on March 17, following the abrupt departure of SEC enforcement chief Margaret Ryan.
The settlement agreement did not require Musk to admit wrongdoing or forfeit any money he allegedly saved.
Twitter, now renamed X by Musk, is currently part of his rocket company SpaceX.
