Elon Musk Under SEC And FTC Probe About His Twitter Takeover

SEC and FTC are after Elon Musk!

Elon Musk Under SEC And FTC Probe About His Twitter Takeover
Image by Abhishek Mishra/FossBytes

Elon Musk may have bought Twitter by force but his problems don’t seem to end. He is under investigation by both SEC and FTC due to his delay in filing the SEC disclosure. As per a disgruntled Twitter shareholder, Musk knowingly delayed his SEC filing, thereby causing a massive loss to the shareholders.

Musk did file Section 13G but the concern is the delay in filing the disclosure. Also, he filled out the wrong form at first, causing more delay in the actual filing. Now, FTC is also investigating the nature of the Twitter buyout.

Elon Musk’s Twitter Timeline

It all began with a few jokes about buying Twitter. Musk then went ahead and bought shares of Twitter and slowly acquired more than a 9% stake in the social media platform. But he did one thing wrong( maybe intentionally). He delayed the filing of SEC disclosure which saved him a lot of money.

According to Twitter shareholder Marc Bain Rasella, Musk knew that if he disclosed that he had bought so many shares, the price of shares would have gone up. That is a normal reaction of the investors in the share market. But he continued acquiring shares and waited for 10 days before filing a disclosure. By keeping mum about the purchase of the shares, he caused a big loss to Twitter shareholders.

Image: Pexels

Rasella believes that had the shareholders known about the purchase of the shares on time, they would have traded accordingly. Now, the price of one share of Twitter is $45.60 which ended up fetching $3.32 billion for Elon’s $2.6 billion investment. Moreover, Musk filed the wrong disclosure which further delayed the process. Now, the SEC probe is reportedly underway and the SpaceX founder may have to pay hefty fines for the same. But SEC can only levy fines and nothing else.

Why is FTC involved?

Federal Trade Commission is investigating the case for violating a law requiring investors to report large transactions to antitrust-enforcement agencies. Two investigations at the same time may pose a hurdle in Elon Musk’s buying spree.

But it seems that the acquisition will go through. Even FCC said that it cannot do anything to stop it. What do you think of the SEC and FTC intervention? Will it disrupt the buyout attempt of Twitter? Share your thoughts in the comments.

Abhishek Mishra

Abhishek Mishra

I love exploring technology and devote my time to curating detailed posts and supplying credible information to inquisitive users. I wish I had some spare time to play a few RPGs or clean my desk.
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