July 8 (Reuters) – A federal judge on Wednesday approved the U.S. Securities and Exchange Commission’s settlement with Elon Musk over his purchase of Twitter shares, despite expressing “significant misgivings” about the accord and the “red flags” it raised.
U.S. District Judge Sparkle Sooknanan in Washington, D.C., said she had a limited role in assessing whether the settlement met minimum standards of fairness and reasonableness, and it was up to the public to decide at the ballot box if the SEC did enough to hold Musk accountable.
The settlement requires a trust in Musk’s name to pay $1.5 million to resolve SEC claims that the world’s richest person took 11 days too long in March and April 2022 to disclose his early purchases of Twitter shares.
According to the SEC, the delayed disclosure let Musk buy at low prices before investors caught on, resulting in $150 million of ill-gotten gains.
Musk has said the delay was inadvertent. He ultimately paid $44 billion for Twitter in October 2022 and renamed it X.
The social media platform is now part of his rocket and satellite company SpaceX. Musk also leads the electric car company Tesla.
(Reporting by Jonathan Stempel in New York, Editing by Franklin Paul and Matthew Lewis)
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