The SEC filed a lawsuit against Elon Musk in Washington DC just before Donald Trump’s inauguration. The lawsuit says that Musk broke federal securities law. They say he didn’t tell everyone soon enough that he owned 5% of Twitter now called X. The SEC thinks he delayed this announcement so he could buy more shares while keeping it a secret.
The SEC also says that by not telling people, Musk was able to buy more shares at cheaper prices. This was not fair because everyone else didn’t know he was buying so much. The lawsuit says these actions broke the rules that are made to make sure the market is fair for all investors.
This lawsuit is a big step by the SEC to look at possible violations by people who buy a lot of stock. The timing right before a new president came in shows that they enforce the rules no matter who is in office. The case is still going on and it will take some time to see what the outcome will be.