back to article SEC sues Elon Musk for allegedly screwing investors out of $150M before Twitter takeover

America's financial watchdog has sued Elon Musk, alleging the billionaire failed to disclose his acquisition of Twitter shares in a timely manner and was therefore able to acquire the social network for $150 million less than would otherwise have been the case. The SEC's beef is that its rules require parties that acquire five …

  1. alain williams Silver badge

    Did Musk/Twitter ever pay its bills ?

    In 2023 there were stories of Twitter not paying rent and being sued. How was this resolved, did Musk get away with non payment ?

    Is this the sort of person who we want in the government of the USA ? Oh, look at the new president - he will fit right in!

    1. Anonymous Coward
      Anonymous Coward

      Re: Did Musk/Twitter ever pay its bills ?

      said it before justice in the US is a joke, and the incoming said he will pardon all the capitol hill protestors. Even if Musk (another possible future POTUS in the making) does get sue'ed he'll probably ask the incoming preseident (close friend now) to pardon him as well. Most of these creeps were once of opposing policitcal views and had fallen out with him at some point and even thrown off their media platforms. Now they are doing a regular rimming on his A-hole on the incoming. Also with the supreme court and the fact that the president can't be imprisoned while in office makes justice a shambles.

      Queue muppets theme , "This is what we call a Muppet showwwww"

      1. John Robson Silver badge

        Re: Did Musk/Twitter ever pay its bills ?

        "Even if Musk (another possible future POTUS in the making) does get sue'ed he'll probably ask the incoming preseident (close friend now) to pardon him as well."

        That would need a constitutional amendment (not US born).

        1. Anonymous Coward
          Anonymous Coward

          Re: Not US born

          That won't stop him once Trump suspends the Constitution. That will pave the way for Leon Skum (anag of his name) to become POTUS for life.

        2. Like a badger

          Re: Did Musk/Twitter ever pay its bills ?

          TOJ might well want to change the constitution, but it certainly won't be to permit a foreign born rival to run, it will be on that pesky two term limit. He can meddle a bit with the electoral arrangement, and then US citizens will have their first president for life.

        3. Anonymous Coward
          Anonymous Coward

          Re: Did Musk/Twitter ever pay its bills ?

          You're thinking small. Why change the constitution? Simply annexe South Africa. Now he's born in the USA. A few people die in the invasion, but nobody he cares about.

        4. Gary Stewart Silver badge

          Re: Did Musk/Twitter ever pay its bills ?

          We simply traded one type of monarchy for another. It just took a couple of hundred years for those in charge to pretty much bypass the constitution via judicial fiat. Or as Trump would put it "constitution, we.don't need no stink'n constitution".

      2. Flocke Kroes Silver badge

        Re: Did Musk/Twitter ever pay its bills ?

        The convicted felon / president can only pardon people for federal crimes. For state crimes the locally elected attorney general decides which crimes to prosecute. For Texas (current home of X, SpaceX and Tesla) that would be Ken Paxton (indicted by Republicans for securities fraud after not prosecuting himself for years). Musk prefers U.S. District Judge Reed O’Connor of the Northern District of Texas for civil suits. Non-payment of bills is a civil matter: X would be sued by the creditor directly without needing the local Attorney general. The forum would be the state or country where the bill falls due. A presidential pardon would not apply.

        Non-payment of bills by X (and SpaceX) have had different results around the world. Some people of got their money. Others have given up the bad debt. Some litigation is still in progress. There are liens against some SpaceX properties: if SpaceX ever sells them the creditor gets paid out of the proceeds.

        A Judge in Brazil collected X fines from local SpaceX/Starlink bank accounts. Normally it is not possible to take money owned by one company for debts owed by another. It can be done if both companies are considered the same person. Not just owned by the same person, you have to prove there is effectively no separation. This is called piercing the corporate veil. Any competent CEO can prevent it by for example not sending Tesla engineers to Twitter.

        In short, if you are desperate enough to need to work for a Musk company require payment in advance. Get your lawyer to read the contract. Collect evidence of completion. Allow a budget for being sued for shoddy workmanship.

        1. MachDiamond Silver badge

          Re: Did Musk/Twitter ever pay its bills ?

          "In short, if you are desperate enough to need to work for a Musk company require payment in advance."

          Even that's dicey. Take the Tesla Fremont, CA plant as an example. That's on the edge of Silicon Valley and the cost of living is very high. You would be taking a chance that if you were invited to leave (a form letter in email/text or you show up and your badge no longer works) could you get out of the lease on your home? How hard would it be to uproot a family and flee since next months round of bills isn't going to get paid. The facility in Nevada is in a place without much other employment unless you fancy working in a distribution warehouse. Austin, TX is a rather weird.

          It's hard to do any sort of planning if the big boss is well known for fits of pique and just fires 10% or more of the company out of the blue. You should know if you are coasting in a job or are unable to keep up and could face the ax-man, but in most places, a company has to give some warning that your aren't meeting goals before they can sack you.

          I was watching a video where a former SpaceX senior engineer said that Elon would call and rant at 3am and you better answer the phone if he does. Holidays missed, rude criticisms and an overall hostile work place. He did say that the work itself was interesting, but somebody with no qualifications telling you that you don't know anything and your work is crap is a bit of an issue.

          1. Androgynous Cow Herd

            Re: Did Musk/Twitter ever pay its bills ?

            "Keep Austin Weird™"

        2. Colin Miller

          Re: Did Musk/Twitter ever pay its bills ?

          "In short, if you are desperate enough to need to work for a Musk company require payment in advance. Get your lawyer to read the contract. Collect evidence of completion. Allow a budget for being sued for shoddy workmanship."

          Much the same if Donnie Drumpf contracts you to do anything

  2. STOP_FORTH Silver badge
    Facepalm

    SpaceX ate my homework

    Gotta hand it to Qantas. Much more imaginative than "leaves on the tracks" or "wrong type of snow".

    Still not as good as "badger ate a junction box", but you can't have everything.

    I didn't get where I am today by writing intelligible comments online.

    1. lglethal Silver badge
      Go

      Re: SpaceX ate my homework

      Actually for once Qantas arent actually wrong here. I know, it feels weird typing that!

      Although the odds of a plane being hit by debris are extremely low, the cost of 300 lives means that usually the airspace where the debris is expected to fall is closed completely.

      If that Info comes too late, Qantas has to change the flight path to go around the area, refile flight plans, likely add more fuel, check new and different areas weather reports, check that they are not going to be impacting another Aircraft's flight paths, etc. It is a fair amount of work, most of it regulatory in nature, meaning it's as slow as a wet week in the west of Wales.

      AND there is no reason for Space X not to put the advisories out significantly earlier. It's not like they decide on the spur of the moment to ditch the rocket. These things are planned meticuluosly months in advance. Just be a good world citizen put your advisories out early, and Qantas can go back to finding other excuses for being late...

  3. abend0c4 Silver badge

    The SEC's beef

    I can imagine Musk's DOGE being keen for it to be dead meat.

    1. STOP_FORTH Silver badge

      Re: The SEC's beef

      0xDEADBEEF surely?

  4. This post has been deleted by its author

  5. Anonymous Coward
    Anonymous Coward

    Like many billionaires

    Musk bought dodgy shares

    In a company called Twitter

    Bur his greedy plan was a fail

    He'll end up in a US jail

    With a prison husband in his $hitter

    1. Bebu sa Ware
      Coat

      Not quite a Limerick.

      Interesting (end) rhyme scheme

      Like many billionaires /Musk bought dodgy shares/In a company called Twitter/That as X did not glitter/Hopefully he'll get twenty years

      Musk bought the Blue Bird/So he could be widely heard/Much fraudulent omission /Drew the ire of the commision/Twenty years in not enough for such a turd

      I imagine he will easily walk away from this and our only hope is that down the track he goes all peculiar and becomes an extreme recluse like Howard Hughes. If he keeps up the intake of his "Special K" he may not be a long term resident of this planet although drinking the Maga lemonade is likely far more toxic.

    2. Pascal Monett Silver badge

      Re: He'll end up in a US jail

      As much as I would like to see him wearing an orange jumpsuit next to Trump's cell, for some reason, I don't think that's going to happen.

      1. DS999 Silver badge

        Re: He'll end up in a US jail

        Even if there was real justice and Trump had deservedly gone to prison for his very real and very serious crimes, there's no chance Musk or anyone else would do time for an SEC reporting violation. The crime is financial, the punishment is financial.

  6. Jellied Eel Silver badge

    Weird

    “In total, Musk underpaid Twitter investors by more than $150 million for his purchases of Twitter common stock during this period"

    I think this is a strange case because the SEC is both right, and wrong given the general consensus is that Musk massively overpaid for Twatter in the first place. Yes, he should have notified that he'd become a significant holder and intended to buy Twatter, but the market figured that out pretty quickly and probably within the disclosure window.

    1. Anonymous Coward
      Anonymous Coward

      Re: Weird

      musk overpaying due to him wrecking twitter to turn it into xhitter is irrelevent.

      keeping up the excuses for a twat!

      makes us all know what you are too!

      1. Jellied Eel Silver badge

        Re: Weird

        makes us all know what you are too!

        Oh look, an anonymous troll has appeared, adding valuable insights to the conversation.. or not.

        1. Elongated Muskrat Silver badge

          Re: Weird

          Just because you may be trolling when you post AC, doesn't mean everyone is. What the AC said was basically correct, and far from trolling, so I'm guessing since you had no proper adult response to it, you just resorted to name calling.

          1. Jellied Eel Silver badge

            Re: Weird

            Just because you may be trolling when you post AC, doesn't mean everyone is.

            Just because you're paranoid delusions make you think I ever post as an AC, it doesn't mean you're right. It's perhaps just indicative of the delusional thinking that's common in TDS sufferers.

            ...so I'm guessing since you had no proper adult response to it, you just resorted to name calling.

            Calling out a troll for trolling isn't name calling, but..

            keeping up the excuses for a twat!

            makes us all know what you are too!

            You think is an 'adult response'? It rather looks like name calling to me. I also don't see where I was 'keeping up excuses', I simply pointed out the absurdity of fining someone who's already overpaid by billions.

            1. dangerous race

              Re: Weird

              Rules & laws - just because Musky bought and fucked Twitter up doesn't mean he should be let off breaking rules regarding his share acquisition from before he got his hands fully on Twitter.

              I'm interested to understand why you, Mr Eel, seem to side with the law breakers. Most others here appear to be on the side of rules and laws being upheld - however long it takes the regulator to get around to doing something.

              You accuse people here of having TDS, I know I haven't, when I hear Trump speak I can hear his words and they often aren't those of a rational human being. How do you know it isn't you that has some problem in your mind and can't see how you are being manipulated or even hypnotised somehow by these bad actors?

              1. Anonymous Coward
                Anonymous Coward

                Re: Weird

                Can someone write me a script to automatically downvote JE's posts, so that it happens without me being exposed to the contents?

                1. Jellied Eel Silver badge

                  Re: Weird

                  Can someone write me a script to automatically downvote JE's posts, so that it happens without me being exposed to the contents?

                  There's a couple of people who've already got those. El Reg doesn't seem at all bothered by that kind of abuse either.

                  But you could also do what most sane people would do and just ignore my posts. If you haven't already read Snow Crash, I'd recommend you do. Just remember it's fiction, and I am not L. Bob, although I am starting to think he might exist and has merrily been spreading TDS as a memetic virus. It seems to have infected a lot of people..

                  1. dangerous race

                    Re: Weird

                    "But you could also do what most sane people would do and just ignore my posts." Mr. Eel

                    An acknowledgement of being a troll? Reported :-)

                    1. Jellied Eel Silver badge

                      Re: Weird

                      An acknowledgement of being a troll? Reported :-)

                      Ah, the good'ol deplatforming & trollbaiting maneuver. I.. really don't see how that would be an acknowledgement. If I said I was trolling, that would be an acknowledgement. Again people see things that aren't there..

                2. Elongated Muskrat Silver badge

                  Re: Weird

                  I'd settle for a block button. He'd complain about "echo chambers" and fail to miss the bit about free speech being about the right to say whatever you like, but not the right to make people listen. I'd not have to scroll past it though, to find the intelligent comments.

              2. Jellied Eel Silver badge

                Re: Weird

                You accuse people here of having TDS, I know I haven't, when I hear Trump speak I can hear his words and they often aren't those of a rational human being.

                Well, you rather make the diagnosis for me. Why do you think his words aren't rational? There's a whole field of psychology relating to normal and abnormal cognition, and people here often demonstrate the abnormal when they attempt to interpret what Trump, Musk or even my humble self say. Of course that's often because they rely on what other people say and to do their thinking for them.. But then that's the dark side of cognitive behaviour therapy and propaganda.

                1. dangerous race

                  Re: Weird

                  Trump talks the way he does as he knows the poorly educated, and just plain morons, will believe what he says, or are so confused by the words he strings together they think he must be talking on a higher plane that they can't understand, and therefore Trump is totally brilliant. Trump is using the tricks of people like David Blaine and other magicians/tricksters, enough people fall for the trick while others turn away and go yeah, nice trick/illusion but you're still a fuckwit. Trump is your actual Wild West snake-oil salesman and dumb people buy his shit.

                  Trump is a dangerous fuckwit, he's fooled enough people (twice) to become POTUS. Time will tell but I predict Trump will increase his record of being impeached twice and make it three - hopefully the third time will be the charm.

                  1. Jellied Eel Silver badge

                    Re: Weird

                    Trump talks the way he does as he knows the poorly educated, and just plain morons,

                    So.. what you're saying is basically the little over 50% of the Americans that voted for him?

                    or are so confused by the words he strings together they think he must be talking on a higher plane that they can't understand

                    Pro tip: Wait for the transcripts. Then you can use a dictionary to look up any words you don't understand. Transcripts are supposed to be official records, but the Biden era regularly altered them. Or just had trouble intrepreting the frequent Bidenisms.. And then there was all the word salad from Harris. I think she got the bit about using repetition to reinforce a point, but missed that the points actually had to make sense.

                    Trump is your actual Wild West snake-oil salesman and dumb people buy his shit.

                    Pretty much all politicians are. They set their wares up on the stumps in every state and flog you hopes and dreams in exchange for a vote. And perhaps a generous contribution. This is how Western democracy 'works'.

                    Time will tell but I predict Trump will increase his record of being impeached twice and make it three - hopefully the third time will be the charm.

                    I'm sure the Demorats have their papers ready. Whether they'll wait until Tuesday remains to be seen. But that's also kind of the problem. The Demorats spent much of the last 9 years or so focusing on Trump, not what the electorate wanted.. Hence the Demorats lost, and the 'red wave' means they'll have a much harder time getting any new impeachment passed. So the Demorats (and their useful idiots) could spend the next 4yrs continuing to incessently attack Trump, or they could perhaps focus in why they lost, and fielding a better candidate and set of policies for the next election.

                    (The UK has much the same problem. The Tories imploded, Labour is heading that way, and maybe this will pave the way for a 3rd party to emerge. Same could happen in the US. A party focused on actually improving the lives of their electorate would provide a refreshing change for both countries.)

                    1. snowpages

                      Re: Weird

                      nearly 50% of the electorate are of below average intelligence...

    2. TheFifth

      Re: Weird

      When he disclosed his purchase, the stock price jumped nearly 30%. If he had disclosed this on March 24th, as he should have done, the stock price would have likely jumped on that day. The problem is that he bought $500 million worth of shares between March 24th and April 4th (when he did finally disclose), so these shares were likely priced at 30% less than they should have been. This is where he should have paid more, not in the final purchase price he paid.

      The fact that he ultimately overpaid when he bought the rest of Twitter is irrelevant, which you likely know, but for some reason you want to make Musk look better and the SEC look worse.

      1. Jellied Eel Silver badge

        Re: Weird

        The fact that he ultimately overpaid when he bought the rest of Twitter is irrelevant, which you likely know, but for some reason you want to make Musk look better and the SEC look worse.

        More paranoia I think. In no way could, or should you think my comment made Musk look better. He grossly overpaid, he didn't make a very good deal, but he did make the far-left's heads explode. He overpaid by billions. I also don't see why you think my comment made the SEC 'look worse'. The fine is possibly a bit vindictive, and normally there's a public interest test involved in making decisions to prosecute like that. The only people to perhaps suffer were those who didn't notice the rather unusual volumes in Twitter stock, which was already moving the share price up and sell during those 10 days.

        And of course if you carry on the paranoia, SEC fines Musk, fine goes to the government, Trump gives the money back to Musk. Wooden dollars at their finest. Then of course the real question is how much in efficiency savings Musk & the DOGE team can find at the SEC, and how this fine might incentivise Musk to sharpen his axe. Cutting the Federal budget by considerably more than $150m should be childs play though.

        1. Anonymous Coward
          Anonymous Coward

          Re: Weird

          it's always in the public interest to stop twats breaking rules even when they have shit tons of money.

          or would you prefer criminals to get away with their actions scott free, like the orange turd. that route leads to anarchy.

          Or do you just want rules and laws upheld against the poor?

          you have very weird logic!

        2. TheFifth

          Re: Weird

          "More paranoia I think. In no way could, or should you think my comment made Musk look better."

          Maybe I am just paranoid, but starting your post with "I think this is a strange case because the SEC is both right, and wrong" seems to indicate that you think the SEC is at least partly in the wrong by going after Musk for breaking the law. Certainly seems like you are lessening the wrongdoing of Musk and suggesting some level of wrongdoing by the SEC. Hence my comment "make Musk look better and the SEC look worse".

          You can disagree (and you will), but that's what I got from what you wrote. You seemed to be shifting some level of blame to the SEC for something that Musk entirely did to himself. The SEC are just doing their job.

          1. Jellied Eel Silver badge

            Re: Weird

            ..seems to indicate that you think the SEC is at least partly in the wrong by going after Musk for breaking the law.

            .. Which is why I mentioned the public interest test. But this has been a theme for the last 4 years, where prosecutions seem to have been rather selective, and arguably politically motivated. Justice should be blind. But taking almost exactly 3yrs from when Musk started accumulating shares to the dying days of the old regime has the appearence of being a little vindicttive. Or perhaps the SEC is just incompetent and has taken 3yrs to assemble what should have been a slam-dunk case from 2022.

            Deciding to issue the fine now just provides more ammunition to anyone who thinks the justice system has been 'weaponised', and doesn't really achieve anything that's in the public interest. Musk's already effectively 'fined' himself billions by overpaying. Investors who didn't notice the volume and might have lost out won't get compensated. And it won't change the opinions of the usual suspects who've been happily dogpiling on Musk ever since he broke down the walls of their echo chamber.. And of course it's small change to the 2nd richest man in the world, so probably won't act as a deterrent.

            1. TheFifth

              Re: Weird

              You didn't mention the "public interest test" in your original post, which is what I was replying to. You didn't even allude to it. Adding that argument in a later reply won't change what my understanding of your original post was. Your original post was just about how the SEC is partly wrong because the consensus is Musk overpaid for Twitter (no idea how any of that matters or how it's related to a public interest test or blind justice in any way). You seem to be completely changing tack.

              Maybe you need to learn to express yourself a little better the first time? Keep at it Champ, you'll get there.

              1. Jellied Eel Silver badge

                Re: Weird

                You didn't mention the "public interest test" in your original post, which is what I was replying to. You didn't even allude to it.

                I didn't think I needed to given it's normally implicit in any decision to prosecute or fine. And I'm not digging into the USC to see if failing to notify is a strict liability offence.

                Maybe you need to learn to express yourself a little better the first time? Keep at it Champ, you'll get there.

                Nice bit of passive aggression their, 'champ'.

            2. Anonymous Coward
              Anonymous Coward

              Re: Weird

              "where prosecutions seem to have been rather selective, and arguably politically motivated. Justice should be blind."

              maybe right wing loons should stop breaking the rules and breaking the law. and lying to cover it up.

              We already have the statements of the right wing loons promising to use the DOJ and other departments for revenge.

              And we know orange clown set the IRS on people he disagreed with, the right is projecting again!.

              1. Jellied Eel Silver badge

                Re: Weird

                maybe right wing loons should stop breaking the rules and breaking the law. and lying to cover it up.

                Huh? You mean the Hunter Biden laptop, tax evasion, firearms rules? Or Papa Joe's classified documents guarded by a Corvette in an open garage that any hooker could walk through? Or do you mean Clinton destroying evidence by wiping her illegal mail server 'with a cloth?'

                But I'm curious. For such an outwardly simple offence, why do you think it's taken the SEC until now to make a half-hearted attempt to prosecute it? Especially as it seems likely that the SEC won't actually be prosecuting it. Maybe the SEC's General Counsel was in such a hurry to clear his desk after resigning that he just rubber stamped everything that was in his in tray and there's absolutely no other reason for the delay.

                1. Anonymous Coward
                  Anonymous Coward

                  Re: Weird

                  At least joe immediately handed the documents back without trying to hide them, unlike your orange turd, storing them on stage and in a toilet and pretending he didn't have them.

                  and the new first lady is the hooker walking through the white house.

                  once again the level of projection is off the charts with right wing loons.

  7. Anonymous Coward
    Anonymous Coward

    What goes up

    I’m sure Musk and SpaceX have no idea where their re-entry debris is at any one time.

  8. Howard Sway Silver badge

    Mr Musk has done nothing wrong and everyone sees this sham for what it is

    Some lawyers are clearly in the wrong business - the world of comedy is crying out for talent like this. Particularly good use of the word "everyone" there. He didn't follow the very clear and simple disclosure rules, and as a result got the shares cheaper then he would have done if his interest had been known, because that would have driven the price up.

    Fighting this lawsuit also draws attention back to the bigger story : that he has wiped tens of billions off the value of what he bought with his subsequent mismanagement of it - so he'd have been better off handing out some pocket change to make it go away.

    1. Bebu sa Ware
      Windows

      Re: Mr Musk has done nothing wrong and everyone sees this sham for what it is

      Some lawyers are clearly in the wrong business

      Those representing the wealthy and powerful are now little more than court jesters (otherwise known as fools) and I am not just thinking of Rudy Giuliani whose liquified brains were visibly leaking from his ear and down the side of head when speaking during Trump's 2020 post election debacle.

      1. blu3b3rry
        Coffee/keyboard

        Re: Mr Musk has done nothing wrong and everyone sees this sham for what it is

        And yet it still wasn't as farcical as his press conference outside Four Seasons Landscaping. You know you've made it when you get to concede an election defeat at a site located between a crematorium and a sex shop.

    2. Elongated Muskrat Silver badge
      Trollface

      Re: Mr Musk has done nothing wrong and everyone sees this sham for what it is

      Shouldn't you be on 4chan? Isn't that where the "Hitler did nothing wrong" meme originated?

      1. Howard Sway Silver badge

        Re: Mr Musk has done nothing wrong and everyone sees this sham for what it is

        That's a quote from his lawyers that is featured in the article, very much not my personal opinion.

        1. dangerous race

          Re: Mr Musk has done nothing wrong and everyone sees this sham for what it is

          Upvote from me as well.

    3. TheFifth

      Re: Mr Musk has done nothing wrong and everyone sees this sham for what it is

      I think the down voters only read the title and not your actual post!

      I've given you an up vote to counterbalance a bit :)

  9. heyrick Silver badge
    Unhappy

    This is a non story

    Expect, as of next Monday, for this to quietly fade away...

    [icon, because justice is dead]

  10. Anonymous Coward
    Anonymous Coward

    another proof the Earth is flat

    I knew it! If it wasn't, Qantas would just fly over Antarctica.

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