The U.S. Securities and Exchange Commission is examining Elon Musk’s initial revelation that he had taken a substantial stake in Twitter. In a letter sent last month, the SEC told Musk that it “does not appear” to have disclosed its acquisition of Twitter shares within the 10-day period required by the agency. The agency also suggested that Musk probably used the wrong form when he finally revealed his involvement, using a document that was not intended for someone hoping to make changes to the company from which it was purchased.
Reports have been found that the SEC was investigating Musk’s disclosure, but this is the first public indication of the investigation. The letter, which was released on April 4 but has just been made public, calls for clarification from Musk on why he chose to use a form for passive investors and whether the agency is wrong in its late submission.
Many things have happened in the nearly two months since this letter was sent. Musk was offered and accepted a seat on the Twitter board; Musk later decided not to join the Twitter board; then Musk made an offer and a subsequent deal to buy all of Twitter. All this activity will give more color to the SEC’s reading of this initial presentation, of which the commission already seems skeptical. If there was any uncertainty about Musk’s activist intentions from April 4, the commission is asking for clarification on some tweets about whether Twitter adheres to the “free speech”, which now seems quite curious, this uncertainty should have already disappeared.
This is just the latest clash between Musk and the SEC, an agency Musk has shown little respect for. Recently, Musk tried to escape an agreement he reached with the agency by his “secured with funding” tweet in 2018, in which he inaccurately stated that he had the money blocked to take Tesla in private. Since then, Musk has claimed that the SEC’s oversight of its Twitter activity, according to the agreement, has been an attempt to “cool its exercise of First Amendment rights.”