SEC Agrees to $1.5M Settlement in Musk Case

Elon Musk is poised to put another clash with regulators behind him for $1.5 million, or around 0.0002% of his net worth. Court filings made public Monday show the Securities and Exchange Commission has reached a proposed settlement with Musk over claims he broke disclosure rules while quietly amassing a stake of more than 5% in Twitter ahead of his $44 billion takeover in 2022, CNBC reports. A trust tied to Musk would pay the civil penalty under the deal, which still has to be approved by the judge overseeing the case. The SEC lawsuit, filed in the last days of Joe Biden's administration, initially sought at least $150 million.

Musk lawyer Alex Spiro framed it as a minor issue, saying, "a trust vehicle has agreed to a small fine for being late on one filing." The SEC declined to comment. The agency had argued that Musk's delayed disclosure let him keep buying Twitter shares at "artificially low prices," disadvantaging other investors. Sources tell Politico that $1.5 million is the largest-ever penalty for such an infraction, though former SEC enforcement official Marc Fagel still finds it concerning. "I do think that it suggests if you're wealthy or powerful enough then there aren't going to be consequences," Fagel says. "The optics of this are terrible."

The agreement adds to Musk's history with the SEC, including a 2018 settlement over his aborted plan to take Tesla private that cost him and Tesla $20 million each. Musk also had to temporarily step aside as chairman of the board. Separately, Musk faces ongoing legal battles, including a class-action case over whether he misled Twitter investors and a lawsuit he filed against OpenAI and CEO Sam Altman over the AI company's direction, reports CNBC.