After Elon Musk bought Twitter in late 2022 he gutted the staff, raising concerns about the safety and stability of the platform he has renamed X
SEC’s lawsuit asserts that Musk’s failure to disclose his stock purchases within the required 10-day window allowed him to benefit unfairly from the timing of his subsequent acquisitions. AFP

Tech billionaire Elon Musk was served with a court summons last week related to a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) over his alleged failure to disclose his Twitter stock purchases in 2022 before making an offer to acquire the company.

According to a filing on Thursday, the legal documents were delivered on March 14 to a security guard at Brownsville, Texas, headquarters of SpaceX, which is headed by Musk, reported Reuters.

The process server reported that upon arriving at the SpaceX facility, the security guards refused to accept the notice, with one guard even accusing him of trespassing. The server ultimately left the documents on the ground and departed, while the security guards photographed him and his car.

The summons relates to the SEC's civil lawsuit filed in January in U.S. District Court in Washington, D.C, which centers on Musk's purchase of Twitter (now renamed X) for $44 billion in 2022.

Before he made his offer to acquire the company, Musk had purchased more than 5% of Twitter's stock, a threshold that legally required him to publicly disclose his holdings within 10 days.

The SEC claims Musk's failure to disclose his stock purchases within the required 10-day window allowed him to purchase additional shares at a lower price, underpaying by at least $150 million, CNBC reported.

After acquiring Twitter, Musk used the platform to support then-candidate and now President Donald Trump, along with other Republican candidates and causes. Musk contributed approximately $290 million to help Trump's return to the White House and now holds a key advisory role in the president's administration.

He also leads the Department of Government Efficiency (DOGE), an organization created by President Trump on January 20, 2025, to modernize federal technology and streamline government spending.

Musk has until April 4 to respond to the summons, either by filing an answer or by seeking to dismiss the case. His legal team will have the opportunity to challenge the lawsuit in court before any further actions are taken.

Musk's Past Issues With SEC

It is not Musk's first case related to securities laws. In 2018, Musk and Tesla settled civil securities fraud charges brought by the SEC. In that case, both Musk and Tesla paid $20 million each in fines. As part of the settlement, Musk agreed to temporarily step down as chairman of Tesla's board.

Changes In SEC Under Trump

Under President Donald Trump, major changes were made to the operations of the SEC. The Trump administration imposed deep budget and staffing cuts at federal regulatory agencies, including the SEC.

As of Mar. 21, the SEC offered $50,000 to employees to encourage early retirement or resignation.

In addition, the Trump administration reversed a long-standing policy that allowed the SEC's director of enforcement to issue formal orders of investigation independently.

The new policy requires any such orders to be approved by a vote of SEC commissioners, potentially slowing down investigations like the one leading to the current lawsuit against Musk.

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