Elon Musk is moving to dismiss a high-profile lawsuit from the U.S. Securities and Exchange Commission (SEC) concerning his 2022 acquisition of Twitter, now known as X. In a motion filed Thursday, his lawyers argue the case is baseless and part of a sustained campaign of harassment by the regulator.
The SEC’s original complaint, filed on January 14, 2025, alleges Musk illegally delayed disclosing his 5% stake in the social media platform. This delay, the agency claims, allowed him to purchase more shares at artificially low prices, disadvantaging other investors.
Musk’s team counters that the late filing was an unintentional error that was immediately corrected upon discovery. They frame the agency’s legal action as a targeted response to Musk’s “protected criticism of government overreach.”
Musk’s Defense: A ‘Ticky-Tack Complaint’ and Targeted HarassmentIn the motion to dismiss filed in a Washington, D.C. federal court, Musk’s legal team asserts that the SEC’s lawsuit should never he been brought. The core of their argument is that the agency fails to allege any malicious intent, stating that the SEC does not claim Musk acted “intentionally, deliberately, willfully, or even recklessly,” according to the filing reported by Reuters.
Instead of a calculated scheme, the defense portrays the situation as a simple, corrected error. The filing notes that Musk stopped purchasing shares and submitted his disclosure just one business day after his wealth manager consulted legal counsel on filing requirements. They frame it as a singular, late filing from three years ago that was “fully corrected immediately upon its discovery,” with no ongoing violation.
This narrative aims to re-characterize the SEC’s enforcement action not as a necessary move to protect market integrity, but as a punitive measure. Musk’s lawyers argue the lawsuit “reveals an agency targeting an individual for his protected criticism of government overreach,” effectively transforming a disclosure dispute into a free speech issue.
This position was previously articulated by Musk’s attorney, Alex Spiro, shortly after the initial lawsuit was filed. In a statement, he dismissed the complaint as nothing more than “a single-count ticky-tack complaint” and part of “a multi-year campaign of harassment” against his client. The recent motion to dismiss doubles down on this aggressive defensive strategy.
The SEC’s Allegations: A Delayed Disclosure Worth $150 MillionThe core of the SEC’s case rests on a foundational principle of U.S. securities law: market transparency. Federal rules require any investor to publicly disclose their holdings within 10 days of acquiring more than 5% of a company’s stock. According to the SEC’s complaint, Elon Musk crossed this critical threshold on March 14, 2022, which set his mandatory filing deadline for March 24, 2022.
However, that deadline passed without any disclosure from Musk. He continued to purchase shares quietly, only revealing his position on April 4, 2022—a full 11 days late. By the time of his announcement, his stake had grown substantially from just over 5% to 9.2%. The SEC contends this was no mere oversight but a calculated move that allowed him to continue accumulating shares before his involvement drove up the price, as detailed in its January lawsuit.
The financial implications of this delay are central to the SEC’s allegations. The agency’s complaint specifies that between March 25 and April 1, 2022, Musk purchased over $500 million worth of additional Twitter stock. Because the market was unaware of his significant and growing stake, the SEC alleges he acquired these shares at “artificially low prices.” The commission puts a figure on this advantage, estimating that Musk underpaid by at least $150 million. When his stake was finally made public, Twitter’s stock surged 27%, underscoring the material impact of the information he had withheld.
The SEC frames this as a direct financial loss for other investors. Those who sold their Twitter stock during that 11-day window did so without the knowledge that a major activist investor was building a position, thereby selling at a lower price than they otherwise would he.
To remedy this, the agency is seeking a court order for the disgorgement of Musk’s alleged $150 million in profits, the imposition of civil penalties, and a permanent injunction to prevent him from committing future violations.
A Contentious History: Musk vs. The RegulatorThis legal battle is the latest flashpoint in a long and acrimonious relationship between Elon Musk and the SEC. Their most famous clash occurred in 2018, when the agency sued him over his “funding secured” tweet regarding a potential plan to take Tesla private.
That case resulted in a settlement that included fines and a requirement for his tweets to be pre-approved. Musk has since fought to overturn this provision, further straining his relationship with the regulator.
Musk has consistently used his social media platform, X, to publicly mock and criticize the SEC. His lawyers now claim the current lawsuit is retribution for this history of dissent, transforming a disclosure dispute into a broader fight over regulatory power.
The timing of the lawsuit is also notable. It was filed just before a leadership change at the SEC, with Gary Gensler stepping down. The current administration under President Donald Trump has appointed Musk as a special adviser, adding a political dimension to the case.