Elon Musk Settles US SEC Lawsuit Over Delayed Twitter Stake Disclosure, Agrees $1.5 Million Penalty

Elon Musk has settled a civil lawsuit brought by the US Securities and Exchange Commission over allegations that he delayed disclosing his initial purchases of Twitter in 2022.

Under the settlement, a trust in Musk’s name will pay a $1.5 million civil penalty, according to filings disclosed on Monday in a federal court in Washington, D.C.. Musk did not admit wrongdoing and will not be required to forfeit the $150 million he allegedly saved by delaying the disclosure.

The agreement is subject to approval by US District Judge Sparkle Sooknanan, who in February rejected Musk’s attempt to have the case dismissed.

The settlement brings to a close more than seven years of contentious dealings between Musk and the regulator, dating back to September 2018, when the SEC charged him with securities fraud over tweets claiming he had “secured” funding to take Tesla private. That case ended with Musk paying a $20 million fine, relinquishing his role as Tesla chairman, and agreeing to oversight of certain social media posts.

In its January 2025 complaint, the SEC alleged that Musk delayed by 11 days in disclosing his initial 5 per cent stake in Twitter in late March and early April 2022. The delay allegedly enabled him to purchase more than $500 million worth of shares at artificially low prices before revealing a 9.2 per cent stake.

Musk maintained that the delay was inadvertent and accused the regulator of infringing his free speech rights. His lawyer, Alex Spiro, said the settlement “clears” Musk of issues related to late filing requirements in the Twitter acquisition.

The SEC had sought both a civil penalty and repayment of the $150 million in alleged gains. The case was filed shortly before former U.S. President Joe Biden left office, with Donald Trump succeeding him. Current SEC Chairman Paul Atkins has since been reshaping the agency’s enforcement priorities.

Criticism of the settlement emerged from Amanda Fischer, a former chief of staff to ex-chair Gary Gensler, who described it as “an embarrassing day” for the regulator and questioned whether it adequately protects ordinary investors.

Legal experts noted that while the $1.5 million fine is modest relative to Musk’s wealth, it may still serve as a deterrent. Robert Frenchman of Dynamis said the penalty signals that regulatory rules apply universally.

Musk completed the $44 billion acquisition of Twitter in October 2022. He later integrated the platform into his artificial intelligence venture xAI, which in turn was folded into his aerospace company SpaceX.

The settlement is separate from another civil case in which a jury in San Francisco found Musk liable on March 20 for defrauding Twitter shareholders during the takeover process. Shareholders alleged that his public remarks about fake and spam accounts — commonly known as bots — were intended to renegotiate or abandon the deal, causing the company’s share price to fall. Damages in that case have been estimated at up to $2.5 billion.

Musk’s legal team is seeking to have that verdict set aside or to secure a new trial, arguing that it was influenced by bias against a polarising defendant.

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