Elon Musk Settles SEC Lawsuit Over Twitter Stock Disclosures for $1.5 Million

Elon Musk settled a civil lawsuit with the U.S. Securities and Exchange Commission over his delayed disclosure of Twitter stock purchases in 2022, agreeing to a $1.5 million civil penalty through a trust in his name. The settlement, disclosed in a Washington D.C. federal court, resolves allegations that Musk waited 11 days too long to report his initial 5% stake, allowing him to acquire additional shares at lower prices before the stock price rose.

Sources across reports confirm the trust did not admit or deny the allegations. The SEC's lawsuit, filed in January 2025, claimed Musk's delay enabled him to save at least $150 million by buying over $500 million in shares at artificially low prices.

After the late disclosure of a 9.2% stake in early April 2022, Twitter's stock price surged. Musk completed the $44 billion acquisition of the company, now known as X, in October 2022.

The SEC accused Musk of violating Section 13(d) of securities law, which requires disclosure within 10 days of acquiring a 5% stake in a public company. Reports indicate the violation was treated under a strict liability standard, meaning intent was not a factor.

Musk described the delay as inadvertent in his defense. In a related development, the settlement does not require Musk to disgorge any alleged savings from the delay. The agency had initially sought repayment of $150 million plus interest and penalties, but the final agreement imposes only the $1.5 million fine on the trust.

One source noted this penalty is the largest in SEC history for this type of violation. U.S. District Judge Sparkle Sooknanan ruled that Musk's arguments on constitutional grounds, including First Amendment claims and allegations of selective enforcement, did not warrant dismissal.

The judge noted Musk did not dispute the core allegation of disregarding disclosure requirements. The case is separate from a March 20, 2026, jury verdict in San Francisco finding Musk liable for defrauding Twitter shareholders. In that class-action lawsuit, jurors determined Musk's statements about bot and spam accounts on the platform caused share prices to fall, leading to investor losses.

Damages in that case could total about $2.5 billion, according to a lawyer for the shareholders, with Musk seeking to overturn the verdict. Musk's relationship with the SEC dates back to a 2018 settlement over tweets about taking Tesla private, where he paid a $20 million fine and agreed to have certain posts reviewed by lawyers.

He gave up his role as Tesla's chair as part of that deal. Forbes estimates Musk's net worth at $789.9 billion, with his ventures including xAI and SpaceX.

The settlement was proposed after both sides indicated in March they were in talks to resolve the matter. This came one day after the SEC's enforcement chief left her position after six months. The agency amended the lawsuit to include the Elon Musk Revocable Trust as a defendant, shifting the penalty and injunction to the trust.

Reports highlight that the SEC investigated the matter for nearly three years before filing the suit. Musk unsuccessfully attempted to move the case to a Texas court before the dismissal motion. The agency did not immediately respond to requests for comment on the settlement.