The US Securities and Exchange Commission is scrutinizing Elon Musk’s initial disclosure that he’d taken a substantial stake in Twitter. In a letter sent last month, the SEC told Musk that he “does not appear” to have disclosed his acquisition of Twitter shares within the agency’s required 10-day window. The agency also suggested that Musk likely used the wrong form when he eventually disclosed his stake, using a document that wasn’t meant for someone who was hoping to make changes at the company being bought into.
Reports have trickled out that the SEC was looking into Musk’s disclosure, but this is the first public indication of the inquiry. The letter, filed April 4th but just now made public, requests clarifications from Musk on why he chose to use a form meant for passive investors and whether the agency is wrong about his filing coming in late.
A lot has happened in the nearly two months since this letter was sent. Musk was offered and accepted a seat on Twitter’s board; Musk later decided against joining Twitter’s board; then, Musk made an offer and subsequent agreement to purchase all of Twitter. All that activity will further color the SEC’s reading of this initial filing, which the commission already seems to be skeptical of. If there was any uncertainty about Musk’s activist intentions as of April 4th — the commission requests clarifications on some tweets about whether Twitter adheres to “free speech,” which now seems fairly quaint — that uncertainty ought to have vanished by now.
This is just the latest standoff between Musk and the SEC, an agency that Musk has shown little regard for. Musk recently tried to escape a settlement he reached with the agency over his “funding secured” tweet in 2018, in which he inaccurately claimed he had the money locked down to take Tesla private. Musk has since claimed the SEC’s oversight of his Twitter activity, per the settlement, has been an attempt to “chill his exercise of First Amendment rights.”