SEC Questions Elon Musk Over Late Disclosure Of Twitter Stake

(RTTNews) - The U.S. Securities and Exchange Commission is investigating Tesla Inc. (TSLA) Chief Executive Officer Elon Musk on his late disclosure of his stake in Twitter Inc. (TWTR).

According to a letter sent to Musk, which has been made public, the regulator has asked Musk why he did not file required paperwork within 10 days of the acquisition, as required by the law.

"Please advise us why the Schedule 13G does not appear to have been made within the required 10 days from the date of acquisition as required by Rule 13d- (c), the rule upon which you represented that you relied to make the submission," the SEC asks in the letter.

According to Musk's own filing, he passed the 5% threshold on March 14, therefore, he should have filed the form by March 24. However, Musk declared his acquisition of a 9.2% stake in Twitter only on April 4.

The SEC also asked Musk about the reason behind him initially filing a "13G" disclosure form, which is meant for investors who plan to hold their shares passively, instead of a "13D" form, which is for activist investors.

In late April, Twitter accepted Musk's takeover offer of about $44 billion to become a privately held company. Musk agreed to pay Twitter shareholders $54.20 in cash for each Twitter share.

However, Musk has kept the deal "on hold" as he seeks more information about the proportion of fake accounts on Twitter.