[Asia Economy New York=Special Correspondent Joselgina] The U.S. Securities and Exchange Commission (SEC) is investigating whether Elon Musk, CEO of Tesla, properly disclosed his acquisition of Twitter shares, major foreign media reported on the 27th (local time).
According to reports, the SEC sent a letter to CEO Musk last month asking why he failed to submit the required documents within ten days of acquiring Twitter shares.
CEO Musk first disclosed on the 4th of last month that he held a 9.2% stake in Twitter. Under U.S. securities law, investors who acquire more than 5% of a company's shares must disclose this within ten days. In this regard, Twitter investors recently filed a lawsuit in a California federal court claiming that CEO Musk bought Twitter shares at a low price through delayed disclosure.
The SEC is also reviewing why CEO Musk used the 13G form, intended for passive investors, when disclosing his Twitter stake acquisition. Activist investors who intend to influence company management and policies must use the 13D form to disclose their share acquisitions.
If a violation of disclosure laws is confirmed, fines of up to several hundred thousand dollars may be imposed. However, such violations are not expected to affect CEO Musk's acquisition of Twitter.
Meanwhile, Twitter announced through a disclosure on the same day that it would not approve the removal of Elon Durbin, a Musk ally, from the board of directors. Earlier, Twitter shareholders decided to oust Durbin, co-CEO of Silver Lake, from the board. Durbin had submitted his resignation after failing to secure enough votes for re-election at the shareholders' meeting.
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