To The Moon

The U.S. Securities and Exchange Commission's lawyers stated on Monday that the agency's settlement agreement with Elon Musk to resolve the Twitter stake case was the result of nearly a year of negotiations. This follows a judge expressing concerns about the proposed settlement.

The $1.5 million civil penalty aligns with the seven-figure fine the SEC's counsel insisted on from the start of formal negotiations and reflects concessions from the defendant's side, who had argued for a significantly smaller amount during the talks, the SEC lawyers wrote in a court filing.

They also noted that the agreement accounts for the litigation risks and the substantial public resources that would be required to handle an appeal, emphasizing that this would be a record penalty for this type of case.

Musk's lawyers similarly praised the settlement as fair and reasonable.

In their filing submitted on Monday, they wrote: "Both sides made concessions and gained something; this compromise reflects the respective positions and defenses of the parties."

The lawyers for both sides submitted separate memoranda to address the "questions" raised by U.S. District Judge Sparkle Sooknanan regarding the proposed penalty. These questions included why the SEC sought to settle with a trust related to Musk and whether the billionaire received special treatment in this case.

In May, Sooknanan stated: "I will not, and cannot, approve this settlement in a perfunctory manner."

The SEC sued Musk in January 2025, alleging he failed to timely disclose his accumulation of Twitter shares in 2022, causing losses exceeding $150 million for shareholders of the social media company. Musk subsequently acquired the company and renamed it X.