The U.S. Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC) are investigating Elon Musk’s ties to Twitter.
The SEC is investigating the billionaire’s delay in filing required documents when investors buy more than 5% of the company’s shares.
Separately, the FTC is investigating whether Musk violated rules by failing to register a huge deal that must be made with antitrust authorities.
The rules require investors to wait 30 days before buying more company stock, a period the regulator uses to determine whether a purchase may be anticompetitive.
While evaluating its first steps as owner of the company, such as the social network charging some users, the deal signing will decide whether to launch an in-depth antitrust investigation into the deal. This will delay negotiations for a few more months.
According to experts, the commission has found little evidence that the businessman violated antitrust laws by buying the Twitter app. However, they are already working on the first purchases, which are estimated to account for 9% of the social network.
The deal was spearheaded by the Republican sector, which hopes to reassert the ousted conservatives once the Musk administration takes effect.
In the meantime, Musk is being helped by cryptocurrency leaders and elites. The billionaire faced several hurdles in his bid to take over Twitter, including financial and app user backlash.
In his defense, 18 investors raised about $7.1 billion for the entrepreneur because they agreed with his vision of a social community on the fringes of scrutiny and wanted to be an important part of it.
Twitter Purchase Temporarily Suspended
The purchase of this social network has also been temporarily suspended by Musk, pending an investigation into the number of fake accounts on the platform.
Musk has assured us that he remains committed to the acquisition of the social network Twitter. However, he put the deal on hold “pending” in favor of the company’s estimate of the details of spam or fake accounts.
In addition to tweeting, billionaire Elon Musk announced that he had temporarily “suspended” his deal to take 100% of the social network for about $44 billion.
On Friday, the founder of luxury automaker Tesla told his more than 92 million followers that he was waiting for the social network to provide him with data on the proportion of its fake accounts, which he had earlier estimated at 5 percent.
To accompany his announcement, Musk published a Reuters report 10 days ago that cited fake account figures that Twitter said were an estimate and warned that the actual figure could be higher.
According to Twitter’s regulatory filings, the estimated number of spam accounts on the microblogging site has held steady below 5 percent since 2013, leading some analysts to wonder why Musk is raising the issue now.
This is not the first time Musk has run into trouble with the SEC
The US Securities and Exchange Commission filed a complaint against Tesla’s CEO in 2018 for misleading investors when he tweeted in August of that year that he was “virtually certain” that the company could be privatized if it so desired.
A tweet sent on the 7th of August of that year caused the price of Tesla stock to plummet. Three investors had also filed a complaint accusing the CEO of manipulating the market with his tweet. In addition, the Department of Justice (DOJ) investigated possible fraud against the electric vehicle company for the same reason.