- On Friday, the SEC revealed that it sent a letter to Elon Musk inquiring about his disclosure of 9.2% stakes in Twitter later than legally required.
- The letter published by the SEC asked four questions to the billionaire, including the question regarding the late disclosure.
- Musk’s bid to buy Twitter still needs approval from Twitter shareholders.
On April 4th, Tesla Boss Elon Musk received a letter from the US Securities and Exchange Commission asking the reason behind the late disclosure of his large stake in Twitter.
This shows the SEC has been closely looking into the billionaire’s late disclosure. Musk disclosed on April 4th that he bought a 9.2% stake in Twitter. With this purchase, Musk becomes the largest shareholder of the social media platform.
Musk revealed this information ten days later than he was supposed to file a public form to the SEC that investors must submit when they buy over 5% of a company’s share.
In April, Musk made a deal with Twitter to buy the social network for $44 billion; however, rumors were that the billionaire was withdrawing the deal. Musk said in a statement that the deal is paused because he wants more details regarding the spam and fake accounts on Twitter. However, he also revealed in a filing this week that he intends to front $33.5 billion of equity he’s committed to the deal. The shareholders of Twitter would need to give their approval to the deal. As per the latest reports, the company, too, has denied that the deal is on hold.
Interestingly, In one of its reports, The Wall Street Journal mentioned that the SEC had its eyes on the issue; however, the agency refused to confirm the investigation. The SEC declined to give any information other than what it has revealed in Public documents.
There were four questions that the SEC asked Musk, along with the question inquiring about the late disclosure. Without alerting shareholders, Musk was able to buy more shares. The SEC has also asked for an explanation from the SEC inquiring why he filed a form meant for passive investors rather than a form meant for activist investors.
Source: https://www.thecoinrepublic.com/2022/05/28/sec-asks-elon-musk-the-reason-behind-his-late-disclosures-of-9-2-stake-in-twitter/