The Securities and Exchange Commission on Monday reached a $1.5 million settlement with Elon Musk in a lawsuit that accused the world’s richest man of violating securities laws in his purchase of Twitter, now called X.
The SEC said Mr. Musk hid purchases of the social media company’s stock in 2022 and failed to disclose them in time, allowing him to default when he bought Twitter for $44 billion later that year. Mr. Musk’s revocable trust will pay the settlement, according to filings in federal court in Washington. A judge has not yet approved the deal.
The settlement ends the Biden administration’s case against Mr. Musk, 54, a former adviser to President Trump. Since last year, the Trump administration has scaled back some of the most aggressive enforcement over allegations of corporate misconduct. Notably, the SEC has backed away from a number of lawsuits against the cryptocurrency industry. Government officials have also dealt with the targets of antitrust and consumer protection lawsuits over the past year, including Amazon and Live Nation, the owner of Ticketmaster.
The deal helps Mr. Musk limit his legal entanglements as his space venture, SpaceX, prepares for an initial public offering. The rocket maker that owns X could go public as early as June in what is expected to be a generational wealth-creating event. SpaceX has valued itself at more than $1 trillion.
The SEC said the settlement was the largest penalty to date for a type of case brought against Mr. Musk. His lawyer, Alex Spiro, said in a statement: “Mr. Musk has now been cleared of any late form filing issues with the Twitter acquisition, as we said from the beginning he would be. The confidential vehicle has agreed to a small penalty for being late in one filing.”
Mr. Musk previously criticized former SEC chairman Gary Gensler, who filed the suit. Mr Musk said on X that the agency’s claims were politically motivated.
The SEC, which requires investors to disclose large stock purchases to signal a potential takeover of the company, sued Mr. Musk in January 2025. According to the suit, he began buying Twitter stock in January 2022. Soon after, the stockbroker managing his purchases warned Mr. Musk’s financial manager that the billionaire needed legal advice about disclosing his position, regulators said. In mid-March 2022, Mr. Musk passed the 5 percent ownership threshold for Twitter, the point at which disclosure is required.
Still, Mr. Musk continued to buy Twitter shares and did not disclose his stake until April 4, 2022, the SEC said in its complaint. After he announced his ownership of Twitter stock, the stock price shot up more than 27 percent.
Because Mr. Musk was waiting for his stake to go public, he was able to continue buying Twitter stock at an artificially low price, saving him $150 million, the suit claimed. On April 14, 2022, Mr. Musk made an offer to buy Twitter.
In a separate deal, the Federal Trade Commission has agreed to withdraw a subpoena it sent to the liberal watchdog group Media Matters, the nonprofit said Monday. The subpoena was part of an FTC investigation that began after Mr. Musk accused Media Matters of trying to damage X’s relationship with advertisers.
In a 2023 lawsuit, X said Media Matters “falsely portrayed” the social media site as a “risky, dangerous platform for advertisers” by highlighting ads that appeared on the platform alongside neo-Nazi and white nationalist content.
Last year, Media Matters successfully sued to block the FTC’s subpoenas, which it said violated the First Amendment. On Monday, Media Matters reported that the agency said in a legal settlement that the group “is not the target of any investigation.” An FTC spokesman declined to comment.
David McCabe contributed reporting.
