The SEC filed the letter on April 4, but it was not made public until May 27. “Our comments ask for additional information so that we may better understand your disclosure,” the SEC stated in the letter.
Among its questions, the SEC inquired why Musk listed his stake in Twitter as being a “passive investor” by filing a Schedule 13G with the agency to report his 9.2 percent shares of Twitter. The following day, on April 5, Musk then filed a long-form Schedule 13D regarding the same shares he reported on the Schedule 13G.
The SEC also inquired why Musk “does not appear” to have disclosed his acquisition of Twitter shares “within the required 10 days from the date of acquisition as required by Rule 13d-1(c), the rule upon which you represented that you relied to make the submission.”
According to Musk’s Schedule 13D filing, his ownership of Twitter stock as of March 14 exceeded 40,032,058 shares, which is 5 percent of the 800,641,166 shares outstanding, as indicated by Twitter’s annual report. Thus, the required 10-day deadline to disclose his acquisition of Twitter shares would have been March 24, rather than his April 4 filing date.
Musk struck a deal in April to buy Twitter for $44 billion. He has since, however, put that deal “temporarily on hold, pending details supporting calculation that spam and fake accounts do indeed represent less than 5 percent of users,” Musk stated in a post on Twitter.
Musk’s History of SEC Run-Ins
This is not the first time Musk has had a dust-up with the SEC as it concerns Twitter. In September 2018, Tesla reached a settlement with the SEC for Musk’s “false and misleading statements” regarding a post he made on Twitter about taking the automaker private. “In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the SEC stated in its complaint.
In the SEC settlement, Musk and Tesla each agreed to pay a $20 million penalty. The SEC further demanded that Tesla “establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications.” Still, Musk has appeared to post messages on Twitter that run afoul of the agreement.
In April, federal judge Lewis Liman denied a motion to nullify a subpoena of Musk seeking information about possible violations of his settlement with the SEC. Musk had asked the Manhattan federal court to scrap the settlement, which required that his tweets be approved by a Tesla attorney before being published. The SEC is investigating whether the Tesla CEO violated the settlement with tweets last November asking Twitter followers if he should sell 10 percent of his Tesla stock. Limon’s ruling said that Musk made the tweets without getting pre-approval. That investigation is still pending. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.