A federal judge is scrutinizing a proposed $1.5 million settlement between Elon Musk and the SEC over his delayed disclosure of a Twitter stake. Judge Sparkle Sooknanan requires more information to determine if the settlement is fair and not a result of collusion.
The SEC’s lawsuit accused Musk of waiting too long to report his stake, potentially saving him $150 million before his eventual $44 billion purchase of Twitter, now rebranded as X. The settlement does not require Musk to admit wrongdoing.
A federal judge has expressed reservations about a proposed $1.5 million settlement between the U.S. Securities and Exchange Commission (SEC) and billionaire Elon Musk, related to his acquisition of Twitter. U.S. District Judge Sparkle Sooknanan in Washington, D.C., has delayed a swift approval, indicating a need for further scrutiny into the terms and the process by which the agreement was reached.
Elon Musk, CEO of Tesla Inc., arriving at federal court in Oakland, California. (David Paul Morris | Bloomberg | Getty Images)
The SEC initiated a lawsuit against Musk in January 2025, alleging that he failed to disclose his accumulating stake in Twitter in a timely manner. The complaint stated that Musk waited 11 days longer than required to report his 5% ownership and subsequently saved an estimated $150 million by the time he disclosed his larger 9.2% stake in April 2022. This settlement comes in the wake of Musk's $44 billion purchase of Twitter, which he has since rebranded as X, six months after the stake disclosure.
Judge Sooknanan emphasized that she must evaluate several critical factors before approving the settlement. These include its overall fairness to all parties involved, its consistency with the public interest, and whether the agreement is free from any "improper collusion or corruption." The court has scheduled a hearing for May 13, requiring both Musk's legal team and the SEC to present arguments and propose a timeline for submitting supporting briefs.
Representatives for Musk and the SEC have not yet provided immediate comments on the judge's decision.
The lawsuit was filed shortly before the end of the Democratic administration, and Musk, a former advisor to Republican President Donald Trump, has previously asserted that the SEC's action was politically motivated, while also attributing the delayed disclosure to an oversight.
The settlement notably does not require Musk to admit any wrongdoing nor does it mandate the repayment of the funds he allegedly saved through the delayed disclosure. The article also mentions that Musk's rocket company, SpaceX, is now intertwined with Twitter (X).
Subscribe to our newsletter to get our newest articles instantly!
MARKET VOWS NEWSLETTER
Stop entering after the move is obvious.
Most traders wait for momentum, confirmation, and headlines. By then, the edge is gone.
Market VOWS shows you where behavior is becoming constrained — where capital is being forced, optionality is collapsing, and price is beginning to be imposed.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
