Elon Musk Faces Dual Legal Setbacks Over Twitter Acquisition

A federal judge has approved a $1.5 million SEC settlement with Elon Musk over his delayed disclosure of Twitter stock purchases, while another judge upheld a jury verdict that Musk defrauded Twitter investors, potentially costing him up to $2.6 billion. The two rulings on consecutive days highlight ongoing legal challenges for the billionaire stemming from his 2022 Twitter takeover.

SEC Settlement Approved

US District Judge Sparkle Sooknanan approved the SEC settlement despite "significant misgivings" about the deal, which requires a trust in Musk's name to pay $1.5 million without admitting wrongdoing Source: engadget. The SEC argued that Musk's 11-day delay in disclosing his stake saved him $150 million Source: cna. Sooknanan questioned whether the Trump administration gave Musk special treatment, writing that the court could not find the settlement made "a mockery of judicial power" but noted the decision on accountability lies with voters Source: techcrunch.

Investor Fraud Verdict Upheld

In a separate ruling, US District Judge Charles Breyer denied Musk's motion to set aside a March 2026 jury verdict that found he defrauded Twitter investors with tweets about the deal being "on hold" due to bot concerns Source: thenextweb. Breyer found "substantial evidence of falsity" in Musk's May 13, 2022 tweet, writing that "buyer's remorse is not an exception to the securities laws" Source: cna. The judge granted prejudgment interest, and investors' damages could reach $2.6 billion Source: aljazeera. Breyer also rejected Musk's claim that jurors mocked him by writing "$4.20" on the verdict form Source: cna.

• Key points from the fraud ruling:
  • The jury found Musk liable for the May 13 tweet but not for all claims Source: thenextweb.
  • Judge Breyer noted Musk's motive to renegotiate the deal Source: aljazeera.
  • Musk's lawyer did not immediately comment Source: cna.

Both cases stem from Musk's tumultuous $44 billion acquisition of Twitter, now renamed X Source: ground-news.