The U.S. Securities and Exchange Commission (SEC) is looking into Tesla CEO Elon Musk’s disclosure of his stake in Twitter Inc in early April, according to a letter the agency sent to him that month.
The SEC asks Musk why it appears he did not file the required paperwork within 10 days of the acquisition and also questions why, when Musk did disclose his stake, he used a form meant for passive investors while he was openly questioning Twitter’s policies around free speech.
He later amended the filing. Musk was offered a board seat shortly after his initial disclosure and has since gone on to attempt to buy the company outright in a $44 billion deal to take it private.
Experts had previously said Musk’s late filing and apparently improper paperwork could attract the attention of the SEC, which has sparred with Musk in the past.
But the financial consequences for the world’s richest man could be limited, as fines for such a misstep would likely rise to a few hundred thousand dollars, according to outside experts.
And others were skeptical that it could endanger Musk’s efforts to acquire Twitter.
In recent times, Musk, the world’s richest billionaire, has been sued by investors claiming he manipulated the company’s stock price downward and profited by not disclosing his investment on time.
The leading billionaire has landed in trouble with the SEC before when the agency sued him in 2018 after he tweeted he had “funding secured” to potentially take the electric car company private at $420 per share. In reality, a buyout was not close.
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