Musk faces trial over claims he cheated Twitter shareholders out of $150m

The Securities and Exchange Commission (SEC) and X owner Elon Musk were unable to reach an agreement and are likely to go to court to settle the 2022 acquisition of Twitter.

“Elon Musk and the US Securities Exchange Commission told a judge they are heading toward a trial over the regulator’s allegations that the billionaire cheated Twitter Inc. investors before his 2022 buyout of the social media platform,” Bloomberg reports about the case.

The case centers on whether Musk violated securities disclosure rules that apply when investors cross certain ownership thresholds in public companies.

In January 2025, the SEC filed charges against Musk for being late in reporting that his stake in Twitter had risen above 5% before launching his takeover bid. This is mandatory within ten days after purchasing this number of shares.

This delay allowed Musk to buy shares at lower prices, costing other shareholders more than $150 million. According to the US competition regulator, Musk should have disclosed earlier how many shares he owned.

According to the latest court filings, neither party believes that a court-managed dispute resolution will resolve the matter at this stage. Therefore, the SEC and Musk are preparing to go to court to present their evidence and let a judge rule on the matter.

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In August 2025, Musk’s legal team tried to dismiss the SEC’s lawsuit, arguing that it was an unnecessary use of court resources. However, the judge rejected this argument in February 2026.

The competition regulator tried to expedite the process by asking the court to rule in its favor, stating that there was no dispute over whether Musk missed the disclosure deadline. The judge denied this request as well.

Those decisions mean both parties are heading toward a prolonged legal battle.

The SEC continues to argue that Musk gained an unfair pricing advantage by delaying his disclosure while Twitter shares were still publicly traded. Musk’s legal team is likely to concentrate on the specifics of timing, intent, and whether investors were actually harmed.

No trial date has been set yet.

Musk acquired Twitter in 2022 for $44 billion, renamed it X, and reorganized the company and platform. The purchase has already led to several court disputes, including claims that the platform overstated the number of fake accounts.

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