WASHINGTON (dpa-AFX) - A U.S. federal judge has approved the Securities and Exchange Commission's settlement with Elon Musk over claims that he disclosed his Twitter share purchases too late in 2022 though she signaled the deal may have let him off too easily.
U.S. District Judge Sparkle Sooknanan said her role was limited to deciding whether the agreement met basic standards of fairness and reasonableness. Even so, she wrote that she had 'significant misgivings,' questioning whether the SEC had done enough to hold Musk accountable.
Under the settlement, a trust in Musk's name will pay a $1.5 million civil penalty to resolve the SEC's allegations that he waited 11 days too long to disclose his growing stake in Twitter. The SEC said the delay allowed Musk to keep buying shares at lower prices, saving an estimated $150 million before the market learned of his purchases. Musk has said the late filing was inadvertent.
Sooknanan also asked why the SEC dropped its earlier request for Musk to give up alleged ill-gotten gains, and why the deal was reached with Musk's trust rather than Musk personally an arrangement that, she noted, could allow him to claim publicly that he was cleared of wrongdoing.
The SEC said the agreement was not the result of collusion and called the $1.5 million penalty the largest ever imposed in a case of its kind. Musk completed his $44 billion acquisition of Twitter in October 2022 and later renamed the platform X.
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