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• SEC sent letter to Musk on April 4, same day he disclosed 9.2% stake in Twitter
• Agency asked Musk to explain why he opted to file 13G disclosure form instead of 13D form
The US Securities and Exchange Commission (SEC) on Friday revealed that the agency has started looking into Tesla Inc (NASDAQ: TSLA) CEO Elon Musk’s late disclosure of his stake in Twitter Inc (NYSE: TWTR).
In the letter to Musk dated April 4, the SEC asked why it appears he did not file the required paperwork within ten days of purchasing the shares of the social media company.
The market regulators require any investor who buys a stake exceeding 5% in a company to disclose their holdings within ten days of crossing the threshold, which Musk failed to do so.
In regulatory filings, Musk has said he crossed that threshold on March 14 but did not make his purchases public until early April.
The letter is dated the same day the billionaire disclosed a 9.2% stake in Twitter.
Moreover, SEC asked Musk to explain why he opted to file a “13G” disclosure form, which is for the investors who plan to hold their shares passively, instead of a “13D” form, which is meant for activist investors who intend to influence management and policies of the company.
The billionaire, who has offered to buy Twitter for $44 billion and take it private, has been sued multiple times by investors.
A group of Twitter shareholders on Wednesday filed a lawsuit in San Francisco federal court against Musk over not disclosing his stake in the social media company properly and claiming that he manipulated the social media company’s stock.
In April, the billionaire was sued in New York by the law firm Block & Leviton regarding the delay in disclosure.
Musk was also sued earlier this month in Delaware Chancery Court by a Florida pension fund seeking to halt the takeover deal because some other big Twitter shareholders supported the buyout, a violation of Delaware law.
Picture Credit: Sky News
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