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U.S. SEC looking into Musk’s Twitter stake purchase

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Washington, May 27 (Reuters)-The US Securities and Exchange Commission (SEC) is investigating the disclosure of Tesla’s CEO Elon Musk’s investment in Twitter. (TWTR.N) According to a letter the agency sent to him that month in early April.

In a letter currently published by the SEC, regulators appear to have not submitted the required documents to Musk within 10 days of the acquisition, and a passive form when Musk discloses shares. I am asking why I used. Investors while he openly questioned Twitter’s policy on free speech.

Specifically, the SEC has masked a “13G” for investors who plan to passively hold shares, rather than a “13D” form for activist investors who intend to manage influentially. We asked you to explain why you chose to submit the disclosure form first. And company policy. He later fixed the filing. Musk was offered a board seat shortly after his first disclosure and has since attempted to fully acquire the company in a $ 44 billion transaction to keep it private.

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A musk spokesperson did not immediately respond to a request for comment. A SEC spokesman declined to comment.

Separately, Twitter said in a Friday filing that it did not accept the resignation of Musk’s ally Egon Durban’s board. Two days ago, Twitter shareholders blocked his reelection, but the company said he would bring “unparalleled operational knowledge of the industry” and instead reduce the role of the board elsewhere.read more

External experts have previously stated that delays in mask submission and apparently improper paperwork can draw the attention of SECs that have sparred with masks in the past.read more

However, according to outside experts, fines for such failures are likely to be in the hundreds of thousands of dollars, so the financial impact on the wealthiest men in the world can be limited. And some were skeptical that Mask’s efforts to buy Twitter could be jeopardized.

“From that point of view, I think the SEC will make a pretty strong claim that he violates securities law,” said Josh White, a financial professor at Vanderbilt University who previously worked as a financial economist at the SEC. Said. But he added that “if it would be disastrous.” [the SEC] This Twitter transaction has been put on hold because Musk submitted the wrong form. “

“Twitter stocks will fall soon … I don’t think the Commission is necessarily interested in interfering with the deal.”

The SEC letter is the same date that Musk disclosed a 9.2% stake in Twitter. The billionaire was sued by investors alleging that he had profited by manipulating the company’s stock price downwards and not disclosing his investment on time.read more

Tesla, Inc. (TSLA.O) The CEO was previously in trouble with the SEC. When the SEC sued him in 2018 after he tweeted, he could keep the electric car company private for $ 420 per share. In reality, the acquisition wasn’t imminent.

However, Reuters has previously hesitated to take Mask to court for recognition of the resulting settlement breach, fearing that the proceedings could be lost, instead simply. He reported that he chose to encourage him to obey.read more

Tesla’s share rose 5.75% in noon trading and Twitter’s share rose 2.2%.

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Report by Nivedita Balu and Sweta Singh in Bangalore, Svea Herbst-Bayliss and Pete Schroeder in Washington Edited by Shinjini Ganguli and Mark Potter

Our criteria: Thomson Reuters trusts the principles.

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