By Jonathan Stempel
May 8 (Reuters) – A federal judge on Friday declined to quickly approve the U.S. Securities and Exchange Commission’s $1.5 million settlement with Elon Musk over his purchase of Twitter, saying she wants more information about whether the accord is fair and how it was reached.
The settlement would resolve an SEC lawsuit accusing Musk of waiting 11 days too long to disclose he had amassed a 5% stake in Twitter, and saving $150 million by the time he revealed a 9.2% stake in April 2022. Musk, the world’s richest person, bought Twitter for $44 billion six months later.
U.S. District Judge Sparkle Sooknanan in Washington, D.C. said that before approving the settlement, she must consider several factors including its fairness to both sides, whether it is consistent with the public interest, and whether it is “tainted by improper collusion or corruption.”
She ordered both sides to appear in court on May 13, and be prepared to propose a timeline to file briefs supporting the settlement.
Lawyers for Musk did not immediately respond to requests for comment. The SEC did not immediately respond to a similar request.
The SEC sued Musk on January 14, 2025, six days before then- Democratic President Joe Biden left the White House.
Musk is a former adviser to Republican President Donald Trump, and has claimed that the lawsuit was politically motivated. He has also said the delayed disclosure was inadvertent.
The Trump administration has curtailed enforcement activity against some types of suspected corporate misconduct, and current SEC Chairman Paul Atkins has been refocusing the regulator’s enforcement priorities.
Musk and the SEC disclosed settlement talks on March 17, one day after SEC enforcement chief Margaret Ryan abruptly left her job.
The settlement did not require Musk to admit wrongdoing, or give up money he allegedly saved.
Twitter, which Musk renamed X, is now part of his rocket company SpaceX.
(Reporting by Jonathan Stempel in New York)
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