Elon Musk Gets Extension in SEC Twitter Stake Lawsuit

Elon Musk, owner of X, has been granted an extension in the civil lawsuit filed by the US Securities and Exchange Commission (SEC).

Elon Musk, the billionaire entrepreneur behind Tesla and SpaceX — and now the owner of the social media platform formerly known as Twitter, X — has been granted extra time to respond to a civil lawsuit filed by the U.S. Securities and Exchange Commission (SEC). The case revolves around allegations that Musk delayed disclosing a significant stake he acquired in Twitter back in 2022, allowing him to quietly snap up more shares before the news went public.

According to a court filing in Washington, D.C., both Musk and the SEC have agreed to postpone the deadline for his official response from June 6 to July 18. The joint filing states that the extension is “reasonable and in the interest of conserving judicial resources,” suggesting that both sides might be negotiating behind the scenes or preparing for what could be a drawn-out legal process.

What’s This Case About?

The SEC’s lawsuit alleges that Musk waited 11 days longer than required to publicly disclose his initial 5% stake in Twitter. Under U.S. securities law, investors must inform the market within 10 days of surpassing a 5% ownership threshold in a public company. Musk allegedly filed his disclosure on April 4, 2022, when he had already amassed a sizable holding, giving him a financial edge over other market participants.

In those extra days, the agency claims Musk was able to buy an additional $500 million worth of Twitter shares at prices that didn’t reflect his growing influence over the company. Had the market known about Musk’s sizable investment earlier, the stock price would likely have surged, increasing the cost of additional purchases.

The SEC’s lawsuit seeks not only to fine Musk but also to force him to surrender any profits improperly gained during that period.

Musk vs. The SEC: A Long and Tense History

This isn’t the first time Musk has clashed with the SEC. In 2018, the agency charged Musk with securities fraud after he tweeted that he had secured funding to take Tesla private at $420 a share — a claim that turned out to be misleading. That case was settled quickly, with Musk stepping down as Tesla’s chairman, paying a hefty fine, and agreeing to have certain tweets pre-approved by legal counsel.

Since then, Musk has remained an outspoken critic of the SEC, even calling the agency names and accusing it of harassment via legal actions. This latest lawsuit marks yet another chapter in their ongoing saga.

What’s Next?

With the deadline pushed to July 18, Musk now has more breathing room to prepare his legal response. Legal experts suggest that while the facts of the case appear relatively straightforward — the timing of a disclosure — the financial stakes and Musk’s track record of aggressive legal maneuvering could complicate the proceedings.

If the court sides with the SEC, Musk could be ordered to pay back profits from those Twitter share purchases and face an additional civil penalty. Alternatively, Musk’s legal team might attempt to settle out of court, as they’ve done in the past.

A Quick Note on X’s Current Status

Since acquiring Twitter and renaming it X, Musk has been busy reshaping the platform. From loosening content moderation policies to integrating financial services, the app has become a testing ground for Musk’s broader ambitions to build an “everything app.” However, the platform has also faced regulatory scrutiny, advertiser boycotts, and fluctuating user engagement in the process.