The Wall Street Journal reported on Wednesday that US regulators are looking into Elon Musk’s delayed disclosure of his substantial position in Twitter Inc (TWTR.N) last month, citing people familiar with the subject.
According to the article, Musk revealed a 9.2 percent ownership in Twitter to the US Securities and Exchange Commission (SEC) on April 4, a delay of at least 10 days after exceeding the 5 percent threshold for declaring a shareholding.
An investor who has more than 5% of a company must file a filing with the SEC within 10 days. It serves as an early warning to stakeholders that a large investor may seek control of the company.
The SEC declined to comment on the claim, and Tesla Inc (TSLA.O) CEO did not reply quickly to a Reuters request for comment.
Aside from the delay, Musk’s April 4 filing described his ownership as passive, implying that he had no intention of taking over Twitter or influencing its management or business.
The next day, though, he was offered a position on Twitter’s board, and a few weeks later, the world’s richest man had agreed to buy the social media company for $44 billion.
Musk, known for his outspoken Twitter rants, has had numerous run-ins with the SEC.
Most recently, a US judge chastised him for attempting to avoid a settlement with the SEC that required control of his Tesla tweets.
The Information reported in April that the Federal Trade Commission is looking into whether Musk violated a regulation requiring firms and individuals to notify certain significant transactions to antitrust enforcement agencies.
Musk agreed to a deal on April 4 that would see him named to Twitter’s board of directors and barred him from acquiring more than 14.9 percent of the company, but Musk decided not to join the board before his appointment took effect on April 9. Musk made a $43 billion offer to buy Twitter on April 13, initiating a takeover effort to buy 100% of Twitter’s stock at $54.20 per share.
He expressed his desire to take Twitter private in a letter to the company’s board. In response, Twitter’s board of directors enacted a shareholder rights plan that makes it much more difficult for any single investor to possess more than 15% of the firm without board permission.