Elon Musk agreed to pay a $1.5 million civil penalty to settle a Securities and Exchange Commission lawsuit accusing him of waiting too long in 2022 to disclose his initial purchases of Twitter $TWTR stock.
The fine is a fraction of the $150 million Musk allegedly saved by disclosing his Twitter stake 11 days late
San Francisco Chronicle/Hearst Newspapers / Getty Images
Elon Musk agreed to pay a $1.5 million civil penalty to settle a Securities and Exchange Commission lawsuit accusing him of waiting too long in 2022 to disclose his initial purchases of Twitter $TWTR stock.
The settlement, made public Monday in Washington, D.C. federal court, says the $1.5 million penalty will be paid by a trust in Musk's name. The agreement still needs approval from U.S. District Judge Sparkle Sooknanan, who previously rejected Musk's attempt to dismiss the case in February. Musk has not admitted to any wrongdoing.
The SEC filed the lawsuit in January 2025, just six days before President Donald Trump's second inauguration. The agency said Musk waited 11 days to disclose that he had bought more than 5% of Twitter's stock. This delay let him buy more shares at lower prices, saving him $150 million while other investors lost out. By law, investors have 10 days to report when their stake in a company goes over 5%. After Musk finally revealed he owned 9.2% of Twitter, the company's shares jumped 27%, according to The Washington Post.
The $1.5 million penalty is the largest in SEC history for this type of violation, according to Engadget. Even so, it represents 1% of the amount the SEC alleged Musk improperly saved. Musk's attorney Alex Spiro said in a statement that "a trust vehicle has agreed to a small fine for being late on one filing."
Amanda Fischer, former chief of staff to ex-SEC Chair Gary Gensler, called it "an embarrassing day for the SEC," telling CNBC the settlement "should cause the public to question whether the SEC is protecting White House insiders at the expense of ordinary investors." Current SEC Chairman Paul Atkins has been refocusing the agency's enforcement priorities since taking over from Gensler.
The announcement that the two parties were pursuing a resolution came on March 17, according to Reuters — the day after Margaret Ryan, the SEC's enforcement chief, departed the agency having served barely six months in the role. Sources familiar with the situation told Reuters that internal disagreements over enforcement direction contributed to her exit.
With this agreement, a legal relationship between Musk and the SEC stretching back more than seven years finally comes to a close. The original 2018 securities fraud charge stemmed from a post in which Musk claimed he had lined up financing to take Tesla $TSLA private. To resolve it, he agreed to a $20 million penalty, stepped down temporarily as Tesla's chairman, and accepted a provision allowing company lawyers to vet certain social media posts before publication.
The Twitter disclosure case is separate from a civil class action in which a San Francisco jury found Musk liable in March for defrauding Twitter shareholders during the run-up to his buyout. The plaintiffs in that action have put potential damages at $2.5 billion, while Musk's attorneys are pursuing either an overturned verdict or a retrial.
Musk finished his $44 billion purchase of Twitter in October 2022 and later changed its name to X. Since then, he has faced several legal disputes related to the deal, including a lawsuit from four former Twitter executives who say they were not paid $128 million in promised severance.
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