Elon Musk’s bid to buy Twitter Inc. is facing closer scrutiny in Washington following a report that the U.S. Securities and Exchange Commission is investigating whether it broke the rules last month when it revealed a large participation in the social media platform.
The Wall Street Journal reported Wednesday that the SEC is investigating Musk’s submission of a form that investors must submit when they amass more than 5% of a company.
The Federal Trade Commission is also examining the world’s richest person’s offer to make Twitter private.
Musk revealed on April 4 that he had acquired over 9% of the company, a week after the regulations allowed and using a deposit typically reserved for passive investors. It has since undertaken a highly public takeover bid.
A SEC spokesperson declined to comment on the Journal’s report. Alex Spiro, Musk’s attorney, did not immediately respond to a request for comment.
Requests from the SEC don’t always lead the regulator to take action.
SEC President Gary Gensler has lobbied to tighten the rules on how investors must disclose that they have acquired a major stake in a company. He called for more transparency and proposed earlier this year to reduce the maximum time an investor has to disclose that they have taken a significant position.
Over the years the SEC has battled repeatedly with the chief executive officer of Tesla Inc. and was already investigating whether he and his brother violated the rules of insider trading by selling shares in the electric carmaker late last year, which is what Musk denied.
He’s also battling regulators in court over the fallout from his infamous tweet that he secured the funds to make Tesla private.
Musk, who struck a deal to acquire Twitter for about $ 44 billion late last month, said the San Francisco-based company has restricted user speech and wants to push it towards a freer approach.
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