One of President Donald Trump’s most vocal allies received a stinging rebuke on Tuesday in a lawsuit against the president’s Securities and Exchange Commission.
In a new order, Judge Sparkle L. Sooknanan of the District of Columbia dismissed a lawsuit filed by Elon Musk over his failure to disclose his ownership stake in Twitter before he officially acquired the company in 2022. Musk had filed a lawsuit challenging the constitutionality of the disclosure requirements. Sooknanan argued Musk was ignoring a “straightforward application of the law.”
Sooknanan also said Musk didn’t deny any of the charges the SEC levied against him. By ignoring disclosure rules, the SEC claimed Musk saved himself about $150 million in the Twitter purchase and caused “substantial economic harm” to investors by artificially keeping the stock price down.
In 2022, Elon Musk began acquiring large amounts of Twitter stock and quickly surpassed the SEC’s disclosure requirements. Once someone reaches a 5% ownership stake in a publicly traded company, they must notify the agency and disclose certain information to the public.
Musk claimed the disclosure rules are unconstitutionally vague, forced him to speak against his will, and were being selectively applied against him. Sooknanan rejected all of his arguments.
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