Scrutiny of Elon Musk’s Twitter moves intensifies in Washington
- Musk disclosed on April 4 that he acquired more than 9 per cent in Twitter, a week later than regulations allow
- Over the years the SEC has repeatedly sparred with the Tesla CEO and was already investigating whether he and his brother violated insider trading rules
Elon Musk’s bid to buy Twitter is facing more scrutiny in Washington following a report that the US Securities and Exchange Commission is probing whether he broke rules last month when disclosing a large stake in the social media platform.
The Wall Street Journal reported on Wednesday that the SEC is investigating Musk’s submission of a form that investors must file when they accumulate more than 5 per cent of a company. The Federal Trade Commission is also reviewing the bid by the world’s richest person to take Twitter private.
Musk disclosed on April 4 that he acquired more than 9 per cent in the company, a week later than regulations allow and by using a filing typically reserved for passive investors. He has since embarked on a highly-public takeover bid.
An SEC spokesman declined to comment on the Journal report. Alex Spiro, a lawyer for Musk, did not immediately respond to a request for comment.
Inquiries by the SEC do not always lead to the regulator taking action.
SEC Chair Gary Gensler has been pressing to tighten rules for how investors must disclose that they have taken a major stake in a company. He has called for more transparency, and earlier this year proposed cutting the maximum time that an investor has to reveal they have taken a significant position.
Over the years the SEC has repeatedly sparred with the Tesla chief executive officer and was already investigating whether he and his brother violated insider trading rules when selling shares in the electric carmaker late last year – something Musk has denied. He is also fighting the regulator in court over fallout from his infamous tweet that he had secured funding to take Tesla private.