Elon Musk wanted to act quickly once he realized he could significantly influence social media influence by buying $3 billion worth of Twitter shares. As announced, the platform announced the addition of edit function the day after Musk was added to the company’s board of directors. But Elon did not plan ahead, and his rash decision could cost him serious problems with none other than the SEC. As it turns out, anyone making a purchase as large as Musk must first notify the SEC and then make their move. According to a report in The Washington Post, the rules require the Tesla CEO to notify the market when the social media share exceeds the 5% threshold.
This delay helped him pocket an impressive $156 million in seconds, after Elon made the decision to acquire a 9% stake in one of the most important social networks in the world. With this move, Musk became the largest shareholder in one of the most influential platforms that exists on the Internet. On March 14, Elon’s investment in Twitter hit 5%, but the markets didn’t get a buy notice until last Monday. it was also when the new broke through all over the world. This is a serious violation of federal law as Musk kept the share price low by not notifying investors of his purchase as he continued to buy shares. By the time Musk filed his disclosure forms, the platform’s share price had soared up to 30%.
Could Elon Musk be in jail for these violations?
To add insult to injury, Elon Musk may have also misled the public when he said he would be a “passive investor”, only to be later announced on Twitter’s board of directors. According to experts, there is a good chance that Elon will receive a prison sentence for the federal crime he committed, but he will most likely receive a slap in the form of a six-figure fine. Don’t forget that Elon is currently the richest person in the world, with an estimated net worth of $280 billion according to Forbes. Elon has been in trouble with the SEC due to various errors or misleading information he has shared over the years. Although this is by far the most serious violation he has committed.