If you work in compliance at a shop that does buyouts, you know all about the filing requirements under Rule 13d-1 and the filing thresholds for Schedule 13D and Schedule 13G. Elon Musk doesn’t care. The SEC cares and finally filed the enforcement against Mr. Musk for his shenanigans around the acquisition of Twitter.
The case is very straightforward. Rule 13d requires investors to disclose a stake of 5% or more in a public company within 10 days. The rule came out of the Williams Act of 1968 to help investors make informed investment decisions by providing information about large acquisitions of securities of a company by someone who has the potential to change or influence control of that company.
Musk’s defense seems to basically be that the SEC should focus on other, more important issues.
Given the timing, this will be dumped on the new Chair of the SEC. We’ll get an early indication of how independent the SEC will be from President Trump. I’m sure Musk will ask that the case be shut down.
I’m sure that buyout shops are closely monitoring this to see whether they have to follow the rule of law and comply.
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