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A federal judge has opted not to rush the approval of a $1.5 million settlement between the Securities and Exchange Commission (SEC) and Elon Musk regarding his Twitter acquisition. The judge has requested further details to ensure the agreement is equitable and properly reached.
The proposed settlement aims to address allegations by the SEC that Musk delayed by 11 days in disclosing his acquisition of a 5% stake in Twitter, a move that allegedly saved him $150 million before he announced a 9.2% stake in April 2022. Musk, the wealthiest individual globally, went on to purchase Twitter for $44 billion six months after these events.
Judge Sparkle Sooknanan of the US District Court in Washington, DC, expressed the need to evaluate various aspects before granting approval. She intends to assess the settlement’s fairness to both parties, its alignment with the public interest, and whether any improper conduct influenced the agreement.
The judge has summoned both parties to court on May 13, where they are expected to present a timeline for submitting supporting briefs for the settlement.
Representatives for Musk have yet to comment on the matter, and the SEC has also not provided an immediate response to inquiries.
The SEC sued Musk on Jan. 14, 2025, six days before then-President Joe Biden left the White House.
Musk is a former adviser to President Trump, and has claimed that the lawsuit was politically motivated. He has also said the delayed disclosure was inadvertent.
The Trump administration has curtailed enforcement activity against some types of suspected corporate misconduct, and current SEC Chairman Paul Atkins has been refocusing the regulator’s enforcement priorities.
Musk and the SEC disclosed settlement talks on March 17, one day after SEC enforcement chief Margaret Ryan abruptly left her job.
The settlement did not require Musk to admit wrongdoing, or give up money he allegedly saved.
Twitter, which Musk renamed X, is now part of his rocket company SpaceX.