The Securities and Exchange Commission of the United States has questioned the world’s richest man about the declaration of his stake in Twitter earlier in April this year. They have asked Elon Musk to clarify the reason behind not filing an important form on time.
Musk received a letter from the US Financial scrutineers asking several questions. The SEC has asked him why has he used the technique meant for the investors following the buy-and-hold strategy instead of that of an active investor during the disclosure of his stake.
The CEO of Tesla has been asked to produce before them further clarification about his tweets concerning the matter of Twitter’s free speech policy. But the main question being asked is about his choice of filing the “13G” form which is meant for the passive investors rather than the “13D” form meant for the active investors. Musk refiled the form as 13D a day after the filing of his initial form and he was offered a board seat after the announcement since then Musk is trying to buy the company wholly at a $44 billion bid.
Musk’s spokesmen did not respond to these questions promptly.
Some of the analysts outside had said that Musk might get into negotiation with SEC for his late and inappropriate filing of the form but this would not put forward any financial repercussion as he is the richest man in the world while some were dubious that this inappropriate step taken by him would create a problem for him to acquire Twitter.
The letter of SEC dates to the time when Musk announced his 9.2% stake in Twitter. Musk has been impeached by the investors sinking Twitter’s stock price and gaining profit by the late declaration of his stake. They have claimed that he saved himself $156 million by not disclosing the fact that he bought more than 5% of Twitter on time.
This is the current dispute between SEC and Musk but back in 2018, Elon Musk got into a problem with the SEC for his tweet on taking the electric car company Tesla out of the stock market and bringing it under his private ownership. However, the purchase of shares was not closed.
According to a few media agencies, the SEC has been unwilling to take Musk to the courtroom, the previous time for his misconduct because they believed that they might lose the case, rather they asked him to obey.