The United States Securities and Exchange Commission (SEC) and Federal Trade Commission (FTC) are investigating Elon Musk over his stake in Twitter. Elon Musk revealed his 9.6% stake in Twitter 10 days after he should have.
The SEC is monitoring the billionaire’s failure to provide documentation required when an investor purchases more than 5% of a company’s stock. The FTC is also investigating whether Musk broke the law by failing to report major transactions to antitrust enforcement agencies.
The law compels an investor to wait 30 days before purchasing more shares of the company, during which time the regulator will assess whether the transaction will harm competition.
The SEC is investigating Elon Musk for the late disclosure of his stake in Twitter which allowed him to accumulate a large number of shares at a lower price than he might otherwise have paid, the Wall Street Journal reported on Wednesday.
Musk’s intention to buy Twitter – ostensibly to preserve free expression – sent shockwaves around the world. Some have hailed the move, saying it will bring much-needed change to Twitter, while others have expressed alarm. Musk has stated that one of the things he will do is to eliminate bots off Twitter.
Musk routinely uses Twitter to express his views on cryptocurrencies, which frequently results in huge price movements for the commodities. One of the biggest winners has been Dogecoin. As a result, some cryptocurrency fans are enthusiastic about the potential of a Musk-led Twitter.
This is not the first time the SEC has investigated Elon Musk’s behavior. In 2018, he was obliged to comply with a settlement concerning tweets. And Musk has previously shown his distaste for the SEC.
The acquisition has been suspended according to the latest announcement from the Tesla CEO, and regulators’ actions may yet put a stop to it. In the meantime, the SEC will continue to look at what it can, which will provide some more drama in what is proving to be an already eventful year.
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