The Securities and Exchange Commission has expanded its investigation into whether Elon Musk properly disclosed his investment in Twitter and his intentions for a social media company, officials said in a filing Thursday.
The agency asked a question about a tweet from Mr. Musk in May. Billionaire claimed that his $ 44 billion acquisition of Twitter “can’t move forward” because of spam on the platform. The tweet suggests that Mr. Musk plans to abandon the deal, and the SEC wrote to Mr. Musk’s lawyer in June. The letter was included in the filings on Thursday.
About Face was a significant change to Twitter’s status that should have been disclosed to agencies and investors, but the required disclosure was not achieved, the SEC wrote in the letter. Authorities also demanded “a clear statement on Mr. Musk’s current plans or proposals for the acquisition of Twitter.”
In response, Mr. Musk’s legal team said he hadn’t changed his plans and was simply asking for more information from Twitter. “Despite Mr. Musk’s desire to obtain information to evaluate potential spam and fake accounts, there were no significant changes to Mr. Musk’s plans and proposals regarding the proposed transactions at that time. “Mr. Musk’s lawyer, Mike Ringler, wrote.and letter To SEC in June
Last week, Musk announced that Twitter would be closed due to the prevalence of spam on the platform. Twitter disputed Musk’s allegations, saying that spam accounts for less than 5% of active users. On Tuesday, the company sued Mr. Musk and forced the acquisition.
The SEC began investigating Mr. Musk’s behavior in April when the millionaire became Twitter’s largest shareholder. In a securities document filed at the time, Mr. Musk stated that his investment was passive and he did not intend to seek control of the company. But ten days later, he launched an aggressive campaign to buy Twitter.
The SEC questioned whether Mr. Musk was really a passive investor and whether he disclosed his shares at the right time. The law requires shareholders who purchase more than 5% of a company’s shares to disclose ownership within 10 days of reaching that threshold. In a regulatory filing, Mr. Musk exceeded that standard on March 14, but he said he did not announce his purchase until April 4.
Investigation is not Mr. Musk’s first brush to the SEC In 2018, the agency scammed him in a tweet claiming he had secured funds to make his electric car company Tesla private. I was charged with. Mr. Musk and Tesla have settled the $ 40 million claim. Under the terms of the contract, if the message contains an important statement about the car manufacturer, Mr. Musk must carry out a tweet by Tesla’s lawyer.
Mr. Musk’s lawyer did not respond to requests for comment. The SEC declined to comment.