US District Judge Sparkle Sooknanan approved a $1.5 million settlement between the US Securities and Exchange Commission (SEC) and Elon Musk regarding Musk’s acquisition of Twitter. The SEC, led by former chair Gary Gensler, had raised concerns about Musk’s 11-day delay in disclosing his investments in the social media platform. The regulator argued that this delay allowed Musk to increase the size of his share in Twitter, saving him $150 million at the expense of shareholders.
Earlier this year, following a change in leadership at both the SEC and the White House, the agency reached a settlement under which Musk paid a civil penalty of $1.5 million while admitting no wrongdoing. The penalty has been perceived by many as insignificant given Musk’s wealth.
Judge Sooknanan’s memorandum and order finalized the settlement but included significant critiques of the case’s handling, according to Reuters. She stated, “This Court is limited to evaluating whether the proposed consent judgment meets minimum standards of fairness and reasonableness.” While she expressed misgivings about the settlement, she noted that it did not meet the threshold of “make[ing] a mockery of judicial power,” compelling her to accept it.
Sooknanan highlighted that accountability for Musk’s actions is ultimately a matter for the public to determine at the ballot box. Her statement indicates the court’s tension between judicial limitations and the expectations of the public regarding regulatory enforcement in high-profile cases.
