Read more at source.
Read more at source.
According to James Park, a professor at UCLA School of Law, the case seems to be a clear violation of a well-established SEC rule. The SEC alleges that Musk crossed the threshold of owning more than 5% of Twitter's common shares by March 14, but didn't publicly disclose his ownership until April 4, making him 11 days late.
The timing of the complaint, nearly three years after the alleged violation, has raised eyebrows. David Rosenfeld, former cohead of the SEC's New York enforcement office, suggests that the SEC's action may be motivated by a desire to finalize the case before the administration changes. The upcoming executive branch changeover could create a more favorable regulatory environment for Musk, who has been a significant donor to political action committees supporting Donald Trump's presidential campaign.
Alex Spiro, Musk's lawyer, views the complaint as a parting shot by the SEC, terming it a continuation of the SEC's 'multiyear campaign of harassment' against Musk. The legal process leading up to the filing of the complaint has been protracted, with Musk allegedly cancelling scheduled testimonies and delaying proceedings.
With the likely appointment of Paul Atkins, known for his lighter regulatory approach, as the new SEC chair, the regulatory landscape might change. However, experts like Adam Pritchard, coauthor of Securities Regulation: Cases and Analysis, suggest that it's not unusual for enforcement actions to be brought after an election with a change in administration on the horizon, as many attorneys look to finalize actions before leaving their positions.
The SEC's complaint against Elon Musk raises critical questions about the intersection of regulatory oversight, personal responsibility, and the influence of political changes on the enforcement of securities laws. The case serves as a stark reminder of the potential implications of failing to comply with reporting requirements in the financial industry.
