The U.S. Securities and Exchange Commission sued Elon Musk on Tuesday, claiming he committed securities fraud by buying shares of Twitter at “artificially low prices.” Musk did this, the SEC alleges, by failing to timely disclose he had built up a position greater than 5% in the company.
The SEC’s lawsuit said that, by not disclosing he was buying up shares, it allowed Musk to “underpay by at least $150 million” for shares he purchased after his financial beneficial ownership report was due.
SEC rules would have required Musk to disclose he surpassed a 5% ownership stake within 10 calendar days; the SEC said Musk did not disclose he reached that mark until 11 days after the deadline.