Trump SEC lets Musk settle $150 million Twitter lawsuit for $1.5 million

Text settings Story text Size Small Standard Large Width * Standard Wide Links Standard Orange * Subscribers only   Learn more Minimize to nav The Trump administration is letting Elon Musk pay a $1.5 million fine to settle a lawsuit that originally sought at least $150 million. If approved by a federal court, the proposed settlement submitted yesterday would require a trust in Musk’s name to pay a $1.5 million civil penalty to the government. The January 2025 lawsuit, filed in the last days of the Biden administration, relates to how Musk purchased a 9 percent stake in Twitter in 2022 and failed to disclose it within 10 days as required under US law. The Securities and Exchange Commission alleged that “Musk was able to continue purchasing shares at artificially low prices, allowing him to underpay by at least $150 million for shares he purchased after his beneficial ownership report was due.” Twitter’s stock price soared after Musk belatedly disclosed his stake, and he bought the company outright later in 2022. The Biden SEC’s January 2025 lawsuit demanded that Musk “pay disgorgement of his unjust enrichment as a result of his violation,” plus interest and a separate civil penalty. But the SEC had investigated the late disclosure and related matters for nearly three years before filing the lawsuit, leaving no time to litigate the case before the Trump administration took over. Musk was accused of violating Section 13(d), which is enforced under a “strict liability” standard. That means it doesn’t matter whether a rule violation was intentional or inadvertent and may explain why the Trump SEC didn’t drop the case against Musk entirely. The Biden SEC filed the case in US District Court for the District of Columbia. Musk unsuccessfully tried to get it moved to a Texas court, and then lost an attempt to have the lawsuit dismissed. The SEC’s original lawsuit was filed against Musk alone. But the Trump administration amended it this week to include the “Elon Musk Revocable Trust” as a defendant and imposed the settlement requirements on the trust instead of Musk. Under a proposed order filed by the SEC yesterday, the Elon Musk Revocable Trust would be “permanently restrained and enjoined from violating” Section 13(d), and the trust would be ordered to pay the fine to the SEC. The trust did not admit or deny the SEC’s allegations, court filings said. Musk lawyer Alex Spiro “said in a written statement that regulators had only fined the trust while dismissing the claims against Musk personally,” according to The Wall Street Journal. “Mr. Musk has now been cleared of all issues related to the late filing of forms in the Twitter acquisition, as we said from the outset he would be,” Spiro said. “A trust vehicle has agreed to a small fine for being late on one filing.” US District Judge Sparkle Sooknanan rejected Musk’s motion to dismiss the case in February 2026. “In his motion, Mr. Musk does not dispute that the Complaint adequately alleges that he disregarded the disclosure requirements of Section 13(d),” Sooknanan wrote. “Rather, he attacks the constitutionality of those requirements. He argues that Section 13(d) cannot be enforced against him because it burdens his constitutional rights under the First Amendment by forcing him to speak against his will; that Section 13(d) is unconstitutionally vague; that the SEC is selectively enforcing Section 13(d) against him; and that the SEC Commissioners are insulated by unconstitutional protections from removal. A straightforward application of the law reveals that none of these arguments warrant dismissal of this lawsuit.” In a separate case related to Musk’s purchase of Twitter, a federal jury found that Musk is liable for making false statements about the number of bot and spam accounts on Twitter. Musk made the claims while trying to back out of his deal to buy the social network. The class action lawsuit alleged that Musk’s false statements caused them to sell at artificially low prices. “Damages have yet to be calculated but Francis Bottini, a lawyer for the shareholders, estimated they could total about $2.5 billion,” Reuters wrote after the March 20 verdict.