A federal judge rejected Elon Musk's attempt to throw out a US Securities and Exchange Commission lawsuit alleging he waited too long to disclose his growing stake in Twitter. Musk had accused the agency of selective enforcement and challenged the case as an affront to his constitutional free-speech rights, among other arguments.
“A straightforward application of the law reveals that none of these arguments warrant dismissal of this lawsuit,” US District Judge Sparkle Sooknanan wrote in an order Tuesday in Washington.
The SEC sued Musk in January 2025, less than a week before President Donald Trump took office. The regulator claimed the billionaire in 2022 amassed shares in Twitter and failed to disclose on time how much his stockpile grew. He later purchased Twitter for $44 billion, took it private and renamed it X.
By waiting too long to reveal his growing stake, Musk was able to buy up shares cheaply, ultimately costing Twitter shareholders more than $150 million, the SEC said.
Musk's attorneys in August sought to dismiss the suit, calling it a “waste of this court's time and taxpayer resources.” The SEC in response urged Sooknanan to find Musk liable without a trial, saying there is “absolutely no dispute” that he missed the disclosure deadline.
“The court does not doubt that Mr. Musk would prefer to avoid having to disclose information that might raise stock prices while he makes a play for corporate control,” Sooknanan wrote. “But the balance Congress struck in Section 13(d) does not violate the First Amendment.”
The case is Securities and Exchange Commission v. Musk, 25-cv-00105, US District Court, District of Columbia (Washington).
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