US District Judge Sparks Defends SEC Lawsuit Against Elon Musk, Suggests Trump May Not Intervene.
A US district judge has ruled that the Securities and Exchange Commission (SEC) is entitled to seek $150 million in disgorgement from Elon Musk over his 2022 Twitter takeover. The case had been expected to be potentially impacted by President Donald Trump's administration.
In a ruling on Tuesday, Judge Sparkle Sooknanan shot down one of Musk's main arguments that the SEC was targeting him as part of a "politically motivated harassment campaign" against Trump-era officials.
Sooknanan found that the government's interest in requiring disclosures to ensure fair markets outweighed Musk's fears that disclosures compelled speech revealing his "thoughts" and "strategy." The judge stated that it would be an unusual choice for courts to accept Musk's argument, as it could foreseeably impact a wide range of laws.
The SEC had alleged that Musk quietly acquired a 9 percent stake in Twitter without filing necessary timely disclosures, allowing him to acquire over 70 million shares at an artificially lower price. This caused substantial economic harm to investors selling Twitter common stock.
Musk's failure to disclose his intent to take over the social network within 10 days of acquiring shares beyond 5 percent was deemed a violation of SEC requirements by Sooknanan.
She dismissed Musk's claim that he could not be held liable for disgorgement and civil penalties due to the First Amendment, stating that Congress had struck an appropriate balance when writing the statute requiring disclosures.
The judge also denied Musk's motion to strike from potential remedies the SEC requests for disgorgement and injunctive relief. The amount of $150 million in disgorgement "appears reasonable," Sooknanan wrote.
Trump has not intervened on Musk's behalf, and it is unclear whether he would do so.
A US district judge has ruled that the Securities and Exchange Commission (SEC) is entitled to seek $150 million in disgorgement from Elon Musk over his 2022 Twitter takeover. The case had been expected to be potentially impacted by President Donald Trump's administration.
In a ruling on Tuesday, Judge Sparkle Sooknanan shot down one of Musk's main arguments that the SEC was targeting him as part of a "politically motivated harassment campaign" against Trump-era officials.
Sooknanan found that the government's interest in requiring disclosures to ensure fair markets outweighed Musk's fears that disclosures compelled speech revealing his "thoughts" and "strategy." The judge stated that it would be an unusual choice for courts to accept Musk's argument, as it could foreseeably impact a wide range of laws.
The SEC had alleged that Musk quietly acquired a 9 percent stake in Twitter without filing necessary timely disclosures, allowing him to acquire over 70 million shares at an artificially lower price. This caused substantial economic harm to investors selling Twitter common stock.
Musk's failure to disclose his intent to take over the social network within 10 days of acquiring shares beyond 5 percent was deemed a violation of SEC requirements by Sooknanan.
She dismissed Musk's claim that he could not be held liable for disgorgement and civil penalties due to the First Amendment, stating that Congress had struck an appropriate balance when writing the statute requiring disclosures.
The judge also denied Musk's motion to strike from potential remedies the SEC requests for disgorgement and injunctive relief. The amount of $150 million in disgorgement "appears reasonable," Sooknanan wrote.
Trump has not intervened on Musk's behalf, and it is unclear whether he would do so.
. I mean, come on, Elon, you knew exactly what you were doing when you swooped in to acquire Twitter without disclosing your plans, didn't you? 
And now the SEC is basically saying you get to keep your ill-gotten gains because some judge decided it's "reasonable" to let you off scot-free? 
Like, no thanks. This just smells like another case of wealthy elites getting away with breaking the law and then whining about it afterwards. It'll be interesting to see if Trump actually does intervene, but I'm not holding my breath 
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. The fact that Trump hasn't intervened on Musk's behalf is kinda telling, though – maybe it's because the SEC's case isn't as politicized as some folks might think 
. But anyway, $150 million in disgorgement seems like a pretty reasonable amount to me 
. I mean, I get where Elon Musk is coming from - doesn't want to reveal his plans, don't wanna hurt investor feelings 
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. The thing is, back in my day we had some real journalism happen 
. People used to care more about the news than just tweeting about it 
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. The whole thing reminds me of when Enron used to play fast and loose with their finances 
. Time's a-changin', kids!
Another day, another big fine coming our way. Elon Musk just got hit with a $150 million bill from the SEC for his Twitter takeover shenanigans 
. I mean, who needs thought-protection when you're trying to screw over investors and inflate your own stock price? 
Not everyone gets a free pass just because they think they're being "creative" 
. The SEC was right to go after him for not disclosing his Twitter takeover plans - it's not like it's rocket science, folks! 
And yeah, Trump hasn't stepped in yet, so maybe he'll keep a low profile on this one 