Trump SEC lets Musk settle $150 million Twitter lawsuit for $1.5 million

The Securities and Exchange Commission, now under the Trump administration, has proposed a settlement requiring Elon Musk to pay just $1.5 million to resolve a lawsuit that originally sought at least $150 million. The January 2025 lawsuit, filed in the final days of the Biden administration, accused Musk of violating Section 13(d) by failing to disclose his 9% stake in Twitter within 10 days as required by law. The SEC alleged that Musk was able to buy shares at artificially low prices, underpaying by at least $150 million. Under the settlement, the Elon Musk Revocable Trust is named as the defendant, must pay the fine, and is permanently enjoined from further violations. Musk's lawyer, Alex Spiro, said the deal clears Musk personally, stating, "A trust vehicle has agreed to a small fine for being late on one filing." The settlement follows a separate jury verdict in March 2026 finding Musk liable for false statements about Twitter bots, with potential damages of $2.5 billion.

This settlement comes after Musk unsuccessfully attempted to move the case to Texas and then to have it dismissed on constitutional grounds. U.S. District Judge Sparkle Sooknanan rejected Musk's motion to dismiss in February 2026, noting that Musk did not dispute the allegations but rather attacked the constitutionality of Section 13(d) under the First Amendment. Despite the strict liability standard—meaning intent is irrelevant—the Trump SEC chose not to drop the case entirely but instead settled for a fraction of the original penalty. Critics may question the leniency, especially given that a separate jury found Musk liable for false statements related to the same Twitter acquisition. The settlement still requires federal court approval.