A federal judge has declined to immediately approve a proposed $1.5 million settlement between Elon Musk and the U.S. Securities and Exchange Commission (SEC) tied to Musk’s 2022 Twitter stock purchase disclosures. The decision adds another twist to the long-running legal battle involving the billionaire entrepreneur and the federal regulator.
U.S. District Judge Sparkle Sooknanan ruled on Friday that more details are needed before the agreement can move forward. The judge said the court must determine whether the settlement is fair, aligned with the public interest, and free from any signs of improper conduct or collusion. Both Musk and the SEC were ordered to appear in court on May 13 to discuss a timeline for filing additional legal briefs supporting the deal.
The SEC originally filed the lawsuit against Musk in January 2025. Regulators accused the Tesla and SpaceX CEO of waiting 11 days too long to disclose that he had acquired more than a 5% stake in Twitter. According to the SEC, the delay allowed Musk to purchase additional shares at lower prices, allegedly saving around $150 million before publicly revealing a 9.2% stake in the social media company in April 2022.
Musk later completed his $44 billion acquisition of Twitter, which he subsequently renamed X and integrated into his broader business empire connected to SpaceX.
The proposed settlement would allow Musk to resolve the case without admitting wrongdoing or returning any of the profits allegedly gained from the delayed disclosure. Musk has repeatedly argued that the SEC lawsuit was politically motivated and said the reporting delay was accidental.
The case has also drawn attention because it comes during a period of changing SEC enforcement priorities under the Trump administration and current SEC Chairman Paul Atkins.
