Washington DC:

Elon Musk was sued on Tuesday by the U.S. Securities and Exchange Commission, which accused the world’s richest person of waiting too long to disclose in 2022 he had amassed a large stake in Twitter, the social media company he later bought.

In a complaint filed in Washington, DC federal court, the SEC said Musk violated federal securities law by waiting 11 days too long to disclose his initial purchase of 5% of Twitter’s common shares.

An SEC rule requires investors to disclose within 10 calendar days, or by March 24, 2022 in Musk’s case, when they cross a 5% ownership threshold.

The SEC said that at the expense of unsuspecting investors, Musk instead bought more than $500 million of Twitter shares at artificially low prices before finally revealing his purchases on April 4, 2022, by which time he owned a 9.2% stake.

Twitter’s share price rose more than 27% following that disclosure, the SEC said.

Tuesday’s lawsuit seeks to force Musk to pay a civil fine and disgorge profits he didn’t deserve.

Musk eventually purchased Twitter for $44 billion in October 2022, and renamed it X.

Alex Spiro, a lawyer for Musk, in an email called the SEC lawsuit the culmination of the regulator’s “multi-year campaign of harassment” against his client.

“Today’s action is an admission by the SEC that they cannot bring an actual case,” he said. “Mr. Musk has done nothing wrong and everyone sees this sham for what it is.”

Spiro added that the lawsuit addresses a mere “alleged administrative failure to file a single form–an offense that, even if proven, carries a nominal penalty.”

OTHER LAWSUITS OVER TWITTER PURCHASES

Musk, an adviser to US President-elect Donald Trump, is worth $417 billion according to Forbes magazine, through businesses such as the electric car maker Tesla and rocket company SpaceX.

He is worth nearly twice as much as Amazon.com founder Jeff Bezos, the world’s second-richest person at $232 billion, Forbes said.

The SEC sued Musk six days before Trump’s January 20 inauguration.

SEC Chair Gary Gensler is stepping down that day, and Paul Atkins, who Trump nominated to succeed him, is expected to review many of Gensler’s rules and enforcement actions.

Musk has also been sued in Manhattan federal court by former Twitter shareholders over the late disclosure.

In that case, Musk has said it was implausible to believe he wanted to defraud other shareholders, and that “all indications” were that his delay was a mistake.

Musk has long feuded with the SEC, including after it sued him in 2018 over his Twitter posts about possibly taking Tesla private and having secured funding to do so.

He settled that lawsuit by paying a $20 million civil fine, agreeing to have Tesla lawyers review some Twitter posts in advance, and giving up his role as Tesla’s chairman.

The SEC also sought sanctions from Musk after he missed court-ordered testimony last September for the Twitter probe, so he could attend the launch of SpaceX’s Polaris Dawn mission at Florida’s Cape Canaveral.

A federal judge in San Francisco rejected that request, because Musk later testified and agreed to pay the SEC’s travel costs.

The case is SEC v Musk, U.S. District Court, District of Columbia, No. 25-00105.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Less than a year ago, tech billionaire Elon Musk was Britain’s star guest at a conference, with the then Prime Minister, Rishi Sunak, playing the role of a fawning interviewer to the world’s richest man. A year on, things have changed in Britain. The Labour government, which came to power in July, has decided not to invite Musk to a mega investment summit to be held in London on October 14.

The Tesla and X boss ostensibly did not like the snub and hit back at the UK government with full force, urging the guests not to go to the UK. “I don’t think anyone should go to the UK when they’re releasing convicted paedophiles in order to imprison people for social media posts,” he said when he learnt he was not invited. 

Origin Story

It is true that many prisoners have been released recently under a government scheme to decongest overcrowded British jails. But there is no evidence to suggest that sex offenders or paedophiles were let out. Musk’s tweets have sparked controversy and raised concerns about the spread of misinformation, with the British media reminding the tech billionaire of his recent acts of “spreading disinformation” about the UK. A few weeks ago, Musk shared a baseless report that the UK was building internment camps in the Falkland Islands for rioters, though he swiftly deleted the tweet after facing backlash.

Prime Minister Keir Starmer addressed Musk’s latest provocative comments during his recent visit to the UN General Assembly (UNGA) in New York. Dismissing them as being vastly different from the positive feedback received from investors, Starmer claimed that the latter have expressed strong interest in attending and that they praised their meeting with the UK government as the best they’ve had.

Why The Summit Is Important

The summit – in its third edition since 2021 – aims to attract significant investment to drive economic growth, a top priority for the Labour government. According to a government release, last year’s meeting generated a promise of nearly £30 billion of investment. This year, as Chancellor (finance minister) Rachel Reeves and Business and Trade Secretary (minister) Jonathan Reynolds join Starmer in showcasing the UK’s potential, the government hopes to secure an investment commitment worth around 60 billion pounds in sectors like technology, green energy and artificial intelligence (AI).

But the elephant in the room is the government’s cold shoulder to Musk. It has ignited debate about the UK’s true commitment to openness and whether it’s willing to engage with influential business leaders who are critical of the Labour government. As the government seeks to reset relations with global trading partners and promote innovation, Musk supporters and the opposition Conservative Party have raised questions about Starmer’s willingness to walk the talk. Despite the tech billionaire’s inflammatory comments, the Labour government’s decision to ignore him smacks of vindictiveness and pettiness. Musk is no ordinary man. His influence on modern business, technology, and society is undeniable. I rate him alongside the Israeli historian and thinker Yuval Noah Harari — both being the visionaries of our time, but with distinct approaches. I would like to say that while Harari focuses on the bigger picture, encouraging introspection and societal evolution, Musk actively shapes the future through groundbreaking technologies. There is no doubt that both visionaries inspire and challenge our understanding of human potential.

Musk, Agent Provocateur

The relationship between Musk and Starmer has been frosty at best since the Labour Party came to power in July. Starmer, many believe, and justifiably, is upset with the American billionaire for his unsavoury remarks on how the Labour government handled the nationwide riots in August. Following the horrific Southport stabbing that claimed the lives of three children, Musk donned the role of an agent provocateur as he unleashed a barrage of criticism against Starmer and his new government. In one of his tweets, he ominously forecast a ‘civil war’ in the UK. Musk has 193 million followers on X, which means whatever he says on the platform gets amplified across the world in seconds. There is no doubt that as violence and riots spread across the country, fueled by misinformation and far-right extremism, Musk’s misleading tweets added fuel to the fire.

The response from Labour MPs was swift and stinging. Leading voices within the party accused Musk of deliberately spreading disinformation and seeking to sow division within British society. One Labour MP described Musk’s intervention as “grossly irresponsible”, suggesting that his comments were intended to play into existing societal fractures for personal or ideological reasons.

But It’s Not Easy To Just Dismiss Musk

Starmer’s office, too, condemned Musk’s “civil war is inevitable” comment and said there was no justification for such remarks. But it’s not easy to silence Musk, who is seen in many right-wing circles as a defender of free speech. He doubled down on Starmer and posted a series of provocative tweets, even accusing the British police of being harsher on White protesters during the riots.

To Starmer’s comment on X that “We will not tolerate attacks on mosques and on Muslim communities”, Musk replied, “Shouldn’t you be concerned about attacks on ‘all’ communities?” In another post, he claimed the UK was censoring online content, and asked “Is this Britain or the Soviet Union?”

Governments And Businessmen Have Clashed Often

The clash between Musk and the UK government is not an isolated incident. Throughout history, influential industrialists and businessmen have challenged governments, often sparking tensions and drama. Indian-born British industrialists, the Hinduja brothers, were embroiled in the “Hinduja Affair” during Tony Blair’s premiership. The brothers were accused of bribing Indian officials to secure defense contracts. Blair’s government faced allegations of improperly granting the Hindujas British passports. But an investigation cleared them. However, the scandal led to the resignation of Blair’s minister, Peter Mandelson. The episode underlined the complex relationships between business, politics, and national interest.

Media mogul Rupert Murdoch’s showdown with the Margret Thatcher government began when he acquired The Times and The Sunday Times newspapers. Murdoch’s media empire was investigated for unexplained business dealings, which eventually led him to sell The Times.

It is a widely known fact that billionaire investor George Soros has long been a thorn in the side of Hungary’s nationalist government, led by Prime Minister Viktor Orbán. Soros’s Open Society Foundation (OSF) promoted democratic values and human rights, which Orbán saw as a threat to his rule. His government launched a campaign against Soros, accusing him of promoting immigration and undermining Hungarian culture. The government also passed laws restricting NGOs, allegedly targeting OSF. Soros ultimately closed the OSF’s Budapest office, citing “unprecedented” government harassment.

Can Regulation Tame X?

Under the Online Safety Act, social media platforms are required to proactively remove illegal content, including inflammatory material, and prevent it from appearing in the first place. The UK’s communications regulator, Ofcom, has the power to punish non-compliant platforms with fines up to £18 million or 10% of their global annual turnover. It is believed the new act, passed last year, gives the government enough power to tame social platforms if they were found to be spreading falsehood in society.

It is reported that some Labour MPs have quietly suggested that action must be taken against Elon Musk for his inflammatory tweets during the riots in August and he should be summoned by Parliament to face questions from MPs. But there are no strong indications of that happening. Not as yet. 

(Syed Zubair Ahmed is a London-based senior Indian journalist with three decades of experience with the Western media)

Disclaimer: These are the personal opinions of the author

Tech billionaire Elon Musk made a lot of noise when he bought Twitter (now X) for $44 billion in 2022. The social media platform has seen quite a few changes since then. 

Now, as per a report by The Telegraph, Elon Musk has fired 6,000 (80 per cent) of the staff. 

The report added that half of the workers were fired within months of the acquisition. It also revealed that Mr Musk had sent his cousin James Musk, and Steve Davis to talk to the employees and justify their roles in the company. People were also asked to share their thoughts on the other employees in the team.

Reportedly, the major lay-offs happened in the diversity and inclusion teams and product development and design. 

The report added, “It was clearly pretty bloated. You had to right-size the organisation. However, Musk went further than anyone predicted. When he cuts a team, he cuts the whole team, and that creates significant chaos.”

A source told The Telegraph, “Musk had been hoping to rebuild the business with a challenger mindset and a clean slate. But lopping off whole divisions without a clear strategy left too many gaps to plug, and talent had plenty of opportunities at fast-growing start-ups like OpenAI rather than struggling Twitter.”

Meanwhile, in his first address after taking over, Elon Musk had warned his employees that “bankruptcy was a possibility if it doesn’t start generating more cash, according to people familiar with the matter.”

He has also asked people employees to brace for 80-hour work weeks, fewer office perks like free food and less work-from-home flexibility. 

San Francisco:

A federal judge on Thursday indicated a willingness to compel Elon Musk to testify again in the U.S. Securities and Exchange Commission’s investigation into his $44 billion takeover of Twitter.

Lawyers for the billionaire appeared in a San Francisco courtroom on Thursday to urge U.S. District Judge Jacqueline Scott Corley to decide against the SEC, which is seeking to force Musk to testify as part of its probe into his 2022 purchase of social media giant Twitter. Another judge previously ruled in favor of the agency.

The SEC sued Musk in October to compel the Tesla and SpaceX CEO to testify after he refused to attend a September interview for the investigation, saying the SEC was trying to “harass” him with a number of subpoenas.

The judge did not issue a decision on Thursday.

“I don’t think that the deposition subpoena is unreasonable. What I don’t know is why does the deposition have to be at an SEC office?” Corley said at a hearing at the United States District Court for the Northern District of California.

The investigation concerns whether Musk broke federal securities laws in 2022 when he bought stock in Twitter, which he later renamed X. It is also reviewing statements and SEC filings he made in relation to the deal, the agency has previously said.

In 2022, Musk supplied the SEC with documents for its probe and also testified via videoconference for two half-day sessions in July of that year, the SEC has said in court documents. Agency lawyers have said they have more questions for Musk after receiving new documents, and had sought additional testimony.

Musk’s lawyer, Rachel Frank, an associate with Quinn Emanuel Urquhart & Sullivan, on Thursday told the judge the additional testimony would be a “burden” for Musk and take him away from obligations to shareholders.

The judge asked whether Musk should be exempt from securities laws and further investigations just because he is a “very busy person” who is running multiple companies.

Musk did not immediately respond to a request for comment.

Thursday’s face-off is the latest dispute in a years-long feud between Musk and the top U.S. markets regulator, dating back to 2018 when he tweeted that he had “funding secured” to take the electric carmaker private.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Islamabad:

A Pakistan High Court on Wednesday said the government must restore social media platform X within one week, a lawyer said, after more than two months of disruption ordered by the interior ministry.

The platform, formerly known as Twitter, has been rarely accessible since February 17, when jailed former prime minister Imran Khan’s party called for protests against a government official’s admission of vote manipulation in February’s election.

Pakistan’s communications authority later admitted in court papers that it was ordered by the Interior Ministry to shut down the site.

“The Sindh High Court has given the government one week to withdraw the letter, failing which, on the next date, they will pass appropriate orders,” Moiz Jaaferi, a lawyer challenging the ban, told AFP.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

San Francisco:

Four former top Twitter executives, including former CEO Parag Agrawal, have sued Elon Musk for over $128 million in severance, the Wall Street Journal reported on Monday.

The other plaintiffs are Ned Segal, Twitter’s former chief financial officer; Vijaya Gadde, its former chief legal officer; and Sean Edgett, its former general counsel, according to the report.

The executives, who led the company during a lengthy and at times hostile takeover process in which they sued the billionaire to follow through with the acquisition after Musk changed his mind, say Musk fired them citing gross negligence and willful misconduct, which they deny, the WSJ reported.

Social media platform X, formerly known as Twitter, did not immediately respond to a Reuters request for comment.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Billionaire Elon Musk’s platform X, which was formerly known as Twitter, is now valued at less than half of what he purchased it for, a year ago. Mr Musk has earlier acknowledged that he had overpaid for Twitter, which he bought for $44 billion, including $33.5 billion in equity. Now, the current value of the company is at $19 billion, almost 55 per cent less than half of what he spent on the social media platform, as per the New York Times. 

The documentation pertaining to the recent stock awards said that X would be providing the equity at a price of $45 per share, with employees able to accumulate restricted stock units over time. According to the company, employees who were issued shares under the previous management would still receive cash payments totalling $54.20 for those shares. However, it is unclear why the share price has not decreased by the same percentage as the company’s worth.

In March this year, Mr Musk told the employees at the company that he believed the company was worth $20 billion and labelled it “an inverse start-up.”

Since taking over Twitter a year ago, Mr Musk has completely redesigned both the business and the social media network. He laid off around 7,500 employees across the globe. Later, modified the content-moderation guidelines and introduced the paid verification procedure. Moreover, advertising, which is a major source of revenue for the company, saw a major drop which caused the cash flow to remain negative in August 2023 with a heavy debt load.

However, the billionaire remains optimistic towards the company’s growth strategy and transforming it into an “everything app”. In a meeting organised on the first anniversary of the acquisition, Mr Musk said, “We’re rapidly transforming the company from sort of what it was, Twitter 1.0, to the everything app with an all-inclusive feature app where you can basically do anything you want on our system. He also spoke about including new features to the microblogging site including dating service.

Although the new owner and CEO Linda Yaccarino were physically absent from the company headquarters, both showered praise on the employees for aiding with the rebranding of the company and launching new features including a revenue share program for the creators, video calls in direct messages and improved live streaming quality.

Brussels:

The European Commission said Thursday it is opening an investigation into Elon Musk’s social media platform X, formerly Twitter, to determine if it has allowed the spread of disinformation about the conflict in the Middle East.

The Commission said it had sent a formal request for information to X in what is a first procedure launched under Brussels’ new European Digital Services Act (DSA). It comes two days after it fired off a warning letter from internal market Commissioner Thierry Breton.

In a statement, the Commission said it was responding to “indications received concerning the presumed transmission of illicit content.”

Its demand for clarification comprises a 40-page document with a raft of specific questions.

Twitter has until October 18 to respond, with a deadline of October 31 for less urgent aspects of the demand for information.

Breton, the Commission’s self-styled “digital enforcer,” told AFP that Thursday’s move is about “protecting our citizens and democracies in offering users a safe environment and reliable sources of information — including in times of crisis.”

X has defended itself against earlier claims from the European Union that it is failing to tackle disinformation around the Gaza-Israel conflict as Brussels investigates.

The firm’s CEO Linda Yaccarino wrote that the platform, formerly Twitter, had “taken action to remove or label tens of thousands of pieces of content” and removed hundreds of accounts linked to Gaza militant organisation Hamas, which attacked Israel on Saturday.

She addressed the letter, dated Wednesday, to Breton, who traded barbs with Musk on social media after accusing the platform of allowing “violent and terrorist content” to circulate.

Breton has sent similar letters of alarm to Mark Zuckerberg, boss of Facebook parent Meta, and on Thursday to TikTok and its CEO Shou Zi Chew.

In each case, Breton gave the platforms 24 hours to get back to him with details of what they are doing to crack down on “illegal content and disinformation” reportedly circulating in posts.

Breton stressed that the large online platforms are now subject to the EU’s Digital Services Act (DSA), legislation that came in two months ago that requires them to crack down on content deemed illegal under EU law or laws of individual EU countries.

Violations of the DSA can be met with mandatory remedial measures to halt such content, or fines that could go up to six percent of a company’s global turnover, or potentially even steps to ban offending platforms from Europe.

Breton posted copies of each of his letters to his accounts on X and on an X rival called Bluesky.

X is especially fixed in Brussels’ crosshairs because Musk, who bought Twitter for $44 billion last year, has gutted its staff, including content moderators, in a bid to save money.

– Young TikTok users at risk –

Yaccarino’s response letter to Breton, reposted by the CEO on her X account, said the firm had taken down posts that involved “violent speech, manipulated media and graphic media”.

She said that more than 700 notes were added to posts in the first four days after the violence erupted in Israel, and they were seen tens of millions of times.

In his letter to TikTok, Breton stressed that its users, who are mainly young, were especially vulnerable to fake and manipulated information.

“Given that your platform is extensively used by children and teenagers, you have a particular obligation to protect them from violent content depicting hostage taking and other graphic videos which are reportedly widely circulating on your platform, without appropriate safeguards,” Breton said.

To Zuckerberg, Breton noted that Meta had made some efforts at content moderation but urged it to be “vigilant” about meeting DSA requirements in light of the current Israel-Hamas conflict.

A Meta spokesperson said in reply the company had quickly set up monitoring teams with experts speaking Hebrew and Arabic, who were working with fact checkers to curb disinformation, and that “we’ll continue this work as this conflict unfolds”.

AFP fact-checkers have found several posts on X, Facebook and TikTok promoting a fake White House document allocating $8 billion in military assistance to Israel.

And several platforms have had users passing off material from other conflicts, or even from video games, as footage from Israel or Gaza.

The EU recently rated X as the worst of any major platform for illegal online content based on a pilot analysis, and Musk has pulled out of a voluntary EU code of practice on battling disinformation.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

The government has issued notices to social media platforms X, formerly Twitter, YouTube, and Telegram to remove child sexual abuse material from their platforms in India, an official statement said on Friday. Minister of State for Electronics and IT, Rajiv Chandrasekhar said if social media intermediaries do not act swiftly, their safe harbour under section 79 of the IT Act would be withdrawn, implying that the platforms can be directly prosecuted under the applicable laws and rules even though the content may have not been uploaded by them.

“Ministry of Electronics and IT has issued notices to social media intermediaries X, YouTube, and Telegram, warning them to remove Child Sexual Abuse Material (CSAM) from their platforms on the Indian internet.

“The notices served to these platforms emphasize the importance of prompt and permanent removal or disabling of access to any CSAM on their platforms,” the statement said.

The notices also call for the implementation of proactive measures, such as content moderation algorithms and reporting mechanisms, to prevent the dissemination of CSAM in the future.

“We have sent notices to X, YouTube, and Telegram to ensure there is no Child Sexual Abuse Material that exists on their platforms. The government is determined to build a safe and trusted internet under the IT rules.

“If they do not act swiftly, their safe harbour under section 79 of the IT Act would be withdrawn and consequences under the Indian law will follow,” Mr Chandrasekhar said.

The Information Technology (IT) Act, 2000, provides the legal framework for addressing pornographic content, including CSAM. Sections 66E, 67, 67A, and 67B of the IT Act impose stringent penalties and fines for the online transmission of obscene or pornographic content, the statement said. 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Wilmington:

Elon Musk, the world’s richest man, is under investigation by the U.S. Securities and Exchange Commission over his $44 billion takeover of social media giant Twitter, according to a Thursday court filing in which the agency sought to compel Musk to testify.

The investigation — which escalates a long-running feud between the SEC and Musk — concerns whether Musk broke federal securities laws in 2022 when he bought stock in Twitter, which Musk renamed X, as well as statements and SEC filings he made in relation to the deal.

The SEC said it subpoenaed Musk in May 2023 requiring him to provide testimony at the SEC’s San Francisco office, and that Musk had agreed to appear on Sept. 15. But then two days beforehand Musk raised “several spurious objections” and told the SEC he would not appear, the SEC said. Musk also refused to SEC proposals to conduct the deposition in Texas in October or November.

Among his objections was that the SEC was trying to “harass” him and that his counsel needed time to review potentially relevant material contained in a biography of Musk published last month, the SEC said.

According to the filing, Musk has given the SEC documents relating to the probe and has previously provided testimony in July last year via video conference.

“The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation – enough is enough,” said a statement from Alex Spiro, an attorney for Musk.

In a press release, the SEC said it was seeking “Musk’s testimony to obtain information not already in the SEC’s possession that is relevant to its legitimate and lawful investigation.” An SEC spokesperson declined to comment further.

Musk acquired Twitter after initially building a large minority stake in the social media platform, which he first disclosed in April 2022. Musk was late with the disclosure filing and initially indicated that he planned to be a passive stakeholder, meaning he did not plan to take over Twitter or influence its management decisions.

Days later, Musk accepted and then turned down a board seat at Twitter. In late April, he announced plans to buy the company for $44 billion but subsequently tried to get out of the deal, alleging Twitter was not disclosing the full extent of bot activity on its platform.

Faced with a trial that sought to compel him to complete the deal, Musk closed his acquisition of Twitter in late October 2022.

Musk-SEC Feud

Thursday’s filing is the latest brushup between Musk and the SEC which have been feuding since Musk’s 2018 tweet that he planned to take his electric carmaker Tesla private and had funding secured. Since then, Musk has repeatedly denigrated the SEC, which has opened multiple probes into Musk over the years.

“A comprehensive overhaul of these agencies is sorely needed, along with a commission to take punitive action against those individuals who have abused their regulatory power for personal and political gains,” Musk said in a post on X.

Howard Fischer, a partner at law firm Moses & Singer and former SEC official, said Musk’s refusal to appear at the September testimony was extraordinary. “I have never heard of a senior executive who has positions at public companies ever not showing up.”

Thursday’s lawsuit adds to Musk’s legal woes. Reuters previously reported the Justice Department is investigating Tesla over self-driving claims. Federal prosecutors in New York have also opened an investigation related to Musk’s corporate perks and claims related to vehicle driving range, a source with knowledge of the probe said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)