There is another reason for the Securities Exchange Commission to pursue Musk.
The world's richest man disclosed Monday that he has acquired a 9.2% stake in the social media company, sending its shares up more than 28% as of mid-day.
Musk accumulated common shares on March 14. According to the financial disclosure, Musk's stake is passive.
Anyone who acquires more than 5% of a company's common shares must report their holdings within 10 days. After March 14, Musk signed his filing.
On March 25, the day after the 10-day period had ended, Musk posted a poll on the social networking site, saying that free speech is essential to a functioning democracy. Do you think that the principle of rigorously adhering to it is followed by Twitter?
The consequences of his own poll will be important. Please vote with care.
At this point, Musk had already acquired his large stake in the micro-messaging service.
SEC disclosure punishments are usually around $100,000. According to Forbes, Musk's net worth is $300 billion. A $100,000 fine is equal to Musk's wealth. A US household has a median net worth of $122,000. A fine of 3 cents is equivalent to a median American household.
Musk's intentions with his stake are not clear. In late January, conservative pundit Souza tagged Musk in a message saying that he can change the political and cultural landscape by buying and taking over.
Musk said he had interesting ideas.
The CEO of the two companies has a history of courting controversy and promoting his companies on the platform.
In September of last year, the SEC charged Musk with making false and misleading statements to investors when he announced via social media that he was considering taking the company private. After that, the deal Musk talked about never materialized.
Musk andTesla revised their settlement with the government in 2019. Under the terms of the deal, Musk had to give up his position as chairman of the board at the company in order to pay the fines.
In June 2020, the SEC said that Musk was in violation of some terms of the agreement that required the CEO to have pre-approved if they contained material business information about the company likely to impact the stock price. The price of shares fell after Musk said that the stock price was too high.
The SEC subpoenaed Musk and the company after he informally asked his followers if he should sell 10% of his holdings. His followers voted yes.
Musk's battles with regulators are often messy and public. In October of last year, the CEO called the SEC a "shortseller enrichment commission" and in July of 2020 he did the same.
Since the financial filing was published, Musk has not said anything about his intentions. He only made a brief statement after revealing the stake on social media.
CNBC asked Musk for comment, but he did not respond immediately.
Josh Brown thinks that Musk should be on the board.
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