The US markets watchdog has sued Elon Musk, alleging that he failed to disclose that he had amassed a stake in Twitter, allowing him to buy shares at “artificially low prices”.
The SEC's lawsuit claims the billionaire Tesla boss saved $150m (£123m) on stock purchases as a result.
According to SEC rules, investors whose holdings exceed 5% have 10 days to report that they have exceeded that limit. The filing stated that Musk did so 21 days after the purchase.
In a post on social mediaMusk called the SEC “a completely broken organization.”
He also accused the regulatory body of wasting its time when “there is so much actual crime that goes unpunished.”
“Musk’s violation resulted in significant economic harm to investors.” The SEC complaint said.
In an emailed statement to BBC News, Musk's lawyer, Alex Spiro, called the lawsuit “sham” and a “campaign of harassment” against his client.
The Securities and Exchange Commission said that Twitter's stock price rose by more than 27% after Musk announced the purchase of its shares to the public on April 4, 2022.
Musk ended up buying Twitter for $44 billion in October 2022, and has since changed the platform's name to X.
The complaint was filed by the SEC in federal court in Washington, D.C Tuesday.
The lawsuit also asked the court to order Musk to relinquish “unfair” profits and pay a fine.
SEC Chairman Gary Gensler announced in November that he would resign from his position when Donald Trump returns to the White House on January 20.
That was after Trump said he planned to fire Gensler on “day one” of his new administration.
Under Gensler's leadership, the SEC has clashed with Musk, a close ally of the president-elect.
But Musk had run-ins with the SEC long before Gensler took office.
In 2018, the regulator accused Musk of defrauding investors by claiming he had “secured financing” to take Tesla, the electric car company he leads, private.
He later settled the charges, resigned as chairman of the company's board and agreed to accept what he called a “Twitter sitter,” limits on what he could write on social media about the company.
