A federal judge on Wednesday gave the green light to a settlement between Elon Musk and the U.S. Securities and Exchange Commission over his acquisition of Twitter shares — even as she voiced “significant misgivings” about the agreement and the “red flags” it presented.
U.S. District Judge Sparkle Sooknanan, sitting in Washington, D.C., acknowledged that her authority to evaluate the deal was narrow — confined to determining whether it cleared minimum thresholds of fairness and reasonableness. She added that it would ultimately fall to the public, through the ballot box, to decide whether the SEC had done enough to hold Musk accountable.
Under the terms of the settlement, a trust bearing Musk’s name must pay $1.5 million to settle SEC allegations that the world’s wealthiest individual waited 11 days longer than required — during March and April of 2022 — before disclosing his early share purchases in Twitter.
The SEC contends that the delayed disclosure allowed Musk to continue buying shares at lower prices before other investors became aware of his stake, resulting in approximately $150 million in improper gains.
Musk has maintained that the delay was unintentional. He went on to complete his full acquisition of Twitter for $44 billion in October 2022, later rebranding the platform as X.
The social media company is now part of his rocket and satellite enterprise SpaceX. Musk also serves as the head of electric vehicle manufacturer Tesla.
