Hope and fear as Elon Musk joins Twitter board
Straight Arrow News

Elon Musk has recently bought 9.2 per cent stakes in Twitter – but now, experts have claimed he could have broken federal law in the process.

Despite sounding like a small figure, the Tesla CEO is now Twitter's largest single shareholder. He holds a higher stake than former chief Jack Dorsey.

However, experts have suggested that Musk failed to inform the Securities and Exchange Commission that the stake surpassed five per cent. The tech mogul reached five per cent on March 14, but this wasn't public knowledge until 11 days later.

If there was a delay in filing the disclosure forms it might have allowed Musk to keep the stock price low while buying shares at a lower cost. According to The Washington Post, it could have also earned him $156 million (£119 million).

The social media platform's share price skyrocketed by 30 per cent when the 50-year-old filed his disclosure forms.

"I really don't know what's going through his mind," finance professor David Kass of the University of Maryland told the news outlet.

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If a violation did occur, the most Musk will likely get is a slap on the wrist in the form of a fine – and while the SEC could possibly argue in court that he has to part ways with his reported profit, it would be a long shot, said Adam Pritchard, a professor of securities law at University of Michigan's law school.

Pritchard said the commission "would have to be really angry with him to try that because they would have a good chance of a court rejecting that argument."

Twitter told indy100 they "won't be commenting here."

indy100 has contacted a representative for Elon Musk for comment.

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