The United States Securities and Exchange Commission (SEC) is suing Elon Musk, the tech billionaire and a Dogecoin supporter, for failing to file his Twitter (now X) timely acquisition disclosures.
The SEC alleges that Musk bought Twitter, the then-public company, at “artificially low prices” due to this delay. The regulator claims Musk saved $150 million as a result.
This lawsuit highlights the seemingly “strained” relationship between the SEC and the SpaceX owner. Neutrals suggest this lawsuit could have ripple effects on Dogecoin (DOGE).
The SEC Allegations Against DOGE’s Elon Musk
Specifically, the SEC claims Musk violated Section 13(d)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 13d-1 by failing to disclose his Twitter shareholdings once they exceeded the 5% threshold.
This law requires investors to file a report within ten days of acquiring more than 5% of a company’s shares.
As the SEC notes, Musk began accumulating Twitter’s common stock in early 2022. By April of that year, he controlled over 5% of the outstanding common stock.
In a lawsuit filed in the United States District Court of Columbia, the regulator alleges that Musk not only failed to file within the ten-day timeframe but took twice as long, disclosing his holdings 21 days later.
Twitter’s share prices surged by over 27% during this period after news of his acquisition became public on April 4, 2022. The SEC argues that Musk’s failure to submit the required filing caused “economic harm” to other Twitter shareholders.
“Because Musk failed to timely disclose his beneficial ownership, he was able to make these purchases from the unsuspecting public at artificially low prices, which did not yet reflect the undisclosed material information of Musk’s beneficial ownership of more than five percent of Twitter common stock and his investment purpose.”
The regulator now seeks to recover what they describe as “unjust profits” and impose further fines on Musk.
Musk, however, views the SEC as a “broken” organization, claiming they are focusing on him instead of addressing “actual crimes.”
Totally broken organization.
They spend their time on shit like this when there are so many actual crimes that go unpunished.
— Elon Musk (@elonmusk) January 15, 2025
In 2018, the SEC sued Musk, accusing him of fraud.
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Elon Musk, SEC, and Impact on Dogecoin (DOGE)
The investment world will be closely watching how this lawsuit unfolds.
His legal troubles could significantly impact Dogecoin (DOGE) holders.
Musk regularly posts about Dogecoin, and his actions and public perception often influence the cryptocurrency’s price.
For example, his naming of the Department of Government Efficiency, the advisory panel created by the incoming president-elect after DOGE, briefly drove up the coin’s price.
The best-performing asset was Dogecoin (DOGE) with a staggering 260%, likely driven by events like the proposed similarly-named Department of Government Efficiency (DOGE).
Bitcoin also saw a notable return of 123%. pic.twitter.com/cE3zyOhYvx
— Coinbase Institutional 🛡️ (@CoinbaseInsto) January 10, 2025
This highlights Dogecoin’s sensitivity to Musk’s actions and public perception.
Last week, Dogecoin
Dogecoin
4.98%
Dogecoin
DOGE
Price
$0.0771
4.98% /24h
Volume in 24h
$548.48M
Price 7d
, along with Bitcoin and other top altcoins, fell.
While prices have recovered and are trading above $0.30, remaining within a bull flag, this legal dispute could slow down bulls.
(DOGEUSDT)
If bearish sentiment persists and the SEC remains adamant, potentially imposing stricter oversight on the billionaire’s financial activities, Dogecoin could fall below the critical support line at $0.30, unwinding Q4 2024 gains.
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