A federal judge has denied Elon Musk’s attempt to dismiss a lawsuit from the US Securities and Exchange Commission (SEC) over delays in reporting his Twitter share purchases.
The ruling marks the latest legal setback for the billionaire, who has long sparred with the regulatory agency.
US District Judge Sparkle Sooknanan in Washington, DC, ruled Tuesday that none of Musk’s arguments were sufficient to end the case.
Musk had claimed the SEC was overreaching and targeting him for criticizing the agency, but the judge rejected those points.
The SEC filed the lawsuit in January 2025, alleging that Musk waited 11 days to disclose his initial 5% stake in Twitter in March and April 2022.
During that period, he purchased more than $500 million in shares at prices the SEC says were artificially low, CNA reported.
The agency is seeking $150 million in repayment for the alleged gains, plus an additional civil penalty.
Musk has described the delay as inadvertent. He also argued that the SEC’s pursuit was “selective enforcement” of federal securities laws and claimed the $150 million fine is excessive under the US Constitution’s Eighth Amendment.
Musk pointed out that the SEC typically seeks only $100,000 in similar cases.
Judge Sooknanan cited congressional intent to protect investors from hidden stock purchases.
🚨 BREAKING: Activist Judge Sparkle Sooknanan BLOCKS Elon Musk from dismissing a weaponized SEC lawsuit against his Twitter-X acquisition
Activist judges MUST BE IMPEACHED! This is madness.
PURGE DEI from the judiciary! pic.twitter.com/CTNZvJwW2K
— Eric Daugherty (@EricLDaugh) February 3, 2026
Elon Musk Must Face Lawsuit Over Delayed Share Filing
Shareholders reaching a 5% ownership stake must disclose their holdings within 10 calendar days, giving other investors the opportunity to act on the information.
“The court does not doubt that Mr. Musk would prefer to avoid having to disclose information that might raise stock prices while he makes a play for corporate control,” Sooknanan wrote. “But the balance Congress struck … does not violate the First Amendment.”
According to the NY Post, Musk has a long history with the SEC. In 2018, he was sued after tweeting that he might take Tesla private and had secured funding.
He settled that case by paying a $20 million civil fine, allowing Tesla lawyers to review some Twitter posts in advance, and giving up his chairman role.
The SEC case comes after Musk’s high-profile $44 billion acquisition of Twitter, which he rebranded as X in October 2022.
Recently, Musk merged his AI company xAI, which includes X, with his space and satellite company SpaceX, creating a private enterprise valued at around $1.25 trillion.
According to Forbes, Musk’s personal fortune now stands at $851.6 billion, more than triple the $277.5 billion wealth of Google co-founder Larry Page.
Lawyers for Musk have not commented on the recent ruling, and the SEC declined to provide a statement.
Originally published on vcpost.com