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 …

[alain williams]

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!

[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"

[John Robson]

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).

[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.

[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.

[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.

[Gary Stewart]

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".

[Flocke Kroes]

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.

[MachDiamond]

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.

[Androgynous Cow Herd]

Re: Did Musk/Twitter ever pay its bills ?

"Keep Austin Weird™"

[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

[STOP_FORTH]

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.

[lglethal]

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...

[abend0c4]

The SEC's beef

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

[STOP_FORTH]

Re: The SEC's beef

0xDEADBEEF surely?

[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

[Bebu sa Ware]

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.

[Pascal Monett]

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.

[DS999]

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.

[Jellied Eel]

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.

[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.

[Jellied Eel]

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.

[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.

[Jellied Eel]

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.

[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.

[Jellied Eel]

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'.

[Anonymous Coward]

What goes up

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

[Howard Sway]

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.

[Bebu sa Ware]

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.

[blu3b3rry]

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.

[Elongated Muskrat]

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?

[Howard Sway]

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.

[dangerous race]

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

Upvote from me as well.

[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 :)

[heyrick]

This is a non story

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

[icon, because justice is dead]

[Anonymous Coward]

another proof the Earth is flat

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