Musk's Legal Battle: Judge Rejects Bid to Move SEC Twitter Lawsuit from DC
A federal judge in Washington D.C. has rejected Elon Musk's bid to transfer an SEC lawsuit over his late disclosure of a Twitter stake to Texas. Judge Sparkle Sooknanan cited Musk's substantial means and time spent outside his chosen forum, despite his claims of being too busy to litigate in the capital. The SEC alleges Musk's delay allowed him to acquire shares cheaply, costing Twitter shareholders millions and seeks a substantial fine.
A federal judge has decisively rejected Elon Musk’s request to transfer a U.S. Securities and Exchange Commission (SEC) lawsuit concerning his late disclosure of a significant stake in Twitter Inc. from Washington, D.C., to Texas. U.S. District Judge Sparkle Sooknanan issued the order on Thursday, underscoring that while she takes Mr. Musk’s convenience seriously, his considerable means and significant time spent outside his preferred forum, Texas, contradict his claims of inability to litigate in the nation's capital.
Musk’s attorneys had argued for the case's relocation, citing their client as an “incredibly busy individual” who works 80-plus hour weeks, often sleeping at his office or factory. They contended that litigating in Washington would impose “substantial burdens” and perpetuate a “years-long campaign” by the SEC against him. Texas is home to several of Musk’s key companies, including Tesla, SpaceX, and his Boring tunnel business, and also where he resides in Austin.
However, Judge Sooknanan noted that Mr. Musk’s own brief indicated he had spent “substantial time” in Washington this year. Furthermore, she considered that Texas judges typically manage larger caseloads compared to her court, assuring that she could proceed with “reasonable alacrity.” The judge also dismissed Musk’s alternative proposal to move the SEC case to Manhattan, where he faces separate lawsuits from former Twitter shareholders.
The SEC initiated the lawsuit in January, alleging that Musk’s 11-day delay in revealing his initial 5% ownership stake in Twitter in early 2022 allowed him to accumulate additional shares at artificially low prices. According to the regulator, this failure to timely disclose his stake cost Twitter shareholders more than $150 million. The SEC is seeking a civil fine from Musk and aims to recover the $150 million he allegedly saved at the expense of unsuspecting investors.
In response to the SEC’s claims, Musk’s attorneys sought dismissal of the suit in August, characterizing it as a “waste of this court’s time and taxpayer resources.” The SEC, conversely, argued that the evidence of a violation is clear and urged the judge to rule in its favor without a trial. Musk acquired Twitter for $44 billion in October 2022, subsequently renaming the social media platform to X. His personal fortune recently surpassed $500 billion, further highlighted in the context of this legal battle.
The case, identified as SEC v Musk, is being heard in the U.S. District Court, District of Columbia, under docket No. 25-00105.