WASHINGTON, Feb 4 — A federal judge yesterday rejected Elon Musk’s bid to dismiss a US Securities and Exchange Commission lawsuit that claimed he waited too long to disclose his purchases of Twitter shares in 2022.

US District Judge Sparkle Sooknanan in Washington, DC, said none of Musk’s arguments warranted a dismissal, including his claim that the SEC overreached in order to punish him for criticising the agency.

Lawyers for Musk did not immediately respond to requests for comment. An SEC spokesman declined to comment.

The SEC sued Musk in January 2025, saying his 11-day delay in revealing his initial 5 per cent Twitter stake in late March and early April 2022 let him buy more than US$500 million (RM2 billion) of shares at artificially low prices.

It wants Musk to repay the US$150 million he allegedly saved at the expense of unsuspecting investors, plus a civil fine.

Musk has called the delay inadvertent. He also said the SEC case amounted to “selective enforcement” of federal securities laws, designed to target him for criticism of “government overreach” that is protected speech under the US Constitution’s First Amendment. Musk also called a US$150 million payout an excessive fine that violates the Constitution’s Eighth Amendment, dwarfing the US$100,000 penalty the SEC has sought in similar cases.

Judge cites congressional intent to protect investors

The SEC requires shareholders to disclose within 10 calendar days when they reach 5 per cent ownership in order to protect investors who might otherwise be kept in the dark and sell their own stock.

In a 45-page decision, Sooknanan said that requirement reflects the intent of Congress to stop investors from buying shares cheaply while they pursue control of a company.

“The court does not doubt that Mr. Musk would prefer to avoid having to disclose information that might raise stock prices while he makes a play for corporate control,” the judge wrote. “But the balance Congress struck … does not violate the First Amendment.”

Musk has long feuded with the SEC.

In 2018, the regulator sued Musk after he said on Twitter he might take his electric car company Tesla private and had secured funding.

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

Musk bought Twitter for US$44 billion in October 2022 and renamed it X.

On Monday, Musk said his rocket and satellite maker SpaceX acquired his artificial intelligence company xAI, whose assets include X. The merger created the world’s most valuable private company, worth about US$1.25 trillion.

Musk is worth US$851.6 billion according to Forbes magazine, more than triple the US$277.5 billion fortune of Google co-founder Larry Page, who ranks second. — Reuters