Musk Loses Bid to Move SEC Suit Over Twitter Stake to Texas

A federal judge rejected Elon Musk’s bid to transfer to a court in Texas a US Securities and Exchange Commission lawsuit alleging he was late in disclosing his 2022 stake in Twitter Inc.

“The Court takes Mr. Musk’s convenience seriously, but it also notes that Mr. Musk has considerable means and spends at least forty percent of his time outside his chosen forum,” US District Judge Sparkle Sooknanan wrote in an order Thursday in Washington. “Indeed, although Mr. Musk may have ‘rarely’ traveled to this District in recent months, Mr. Musk’s brief itself indicates that he has spent substantial time here this year.”

The SEC sued Musk in January, more than two years after he bought Twitter for $44 billion and less than a week before President Donald Trump took office. The Wall Street regulator allegedthe serial entrepreneur blew the deadline to file a special form saying he had accumulated at least a 5% ownership stake in Twitter before launching a takeover bid of the social media platform.

By waiting too long to reveal his stake, Musk was able to stockpile shares on the cheap. The failure to timely disclose cost Twitter shareholders more than $150 million, the SEC said.

Musk’s attorneys in August sought dismissal of the SEC’s suit, calling it a “waste of this court’s time and taxpayer resources.” The SEC fired back, saying that the evidence of a violation is clear and asking the judge to rule in its favor without a trial.

Musk’s attorneys also requested that the case be moved from Washington, where the SEC is headquartered, to Texas, where several of his companies are based.

“Forcing Mr. Musk to litigate in this district would merely perpetuate and compound the harm from the SEC’s years-long campaign against him,” Musk’s attorneys wrote in a filing at the time.

To contact the reporter on this story:
Nicola M White in Washington at nicwhite@bloomberg.net

To contact the editors responsible for this story:
Megan Howard at mhoward70@bloomberg.net

Peter Blumberg

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