The US Securities and Exchange Commission (SEC) is probing Tesla and SpaceX CEO Elon Musk as he didn't promptly disclose his ownership stake in the company after buying 5% of TWTR, the Wall Street Journal (WSJ) has learned.
According to sources close to the matter, the watchdog wants to find out if the billionaire violated the law as investors are obliged to submit a special form to the SEC when they buy more than 5% of a company's shares. The Tesla CEO first filed with the SEC on April 4, which is 10 days after the deadline. The report says Musk also didn't explain why he didn’t file in a timely manner.
Daniel Taylor, a University of Pennsylvania accounting professor, hinted in a commentary to the WSJ that Musk might have intentionally kept the low profile as that investment strategy saved him over $143 million:
The case is easy. It's straightforward. But whether they're going to pick that battle with Elon is another question.
The WSJ notes that the SEC might not publicly accuse Musk of law violations as "not every probe results in formal action." As of press time, not Elon Musk nor the SEC made official statements on the matter.
However, the Federal Trade Commission (FTC) is also reportedly investigating if Musk violated a law by failing to report large transactions to antitrust-enforcement agencies. According to a peson familiar with the matter, the FTC might impose fines of up to $43,792 a day if it proves that Musk had indeed violated the law.
Earlier, To The Moon reported that Elon Musk acquired Twitter for approximately $43 billion, giving $54.20 per share. Later, reports revealed changes that the Tesla CEO plans to bring to Twitter in order to increase the company's profitability.
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