A federal judge on Wednesday approved a $1.5 million settlement between the Securities and Exchange Commission and Elon Musk concerning his purchase of Twitter shares, but the judge made clear she had deep reservations about the agreement.
U.S. District Judge Sparkle Sooknanan, sitting in Washington, D.C., said she had "significant misgivings" about the proposed settlement while also noting the narrow nature of the court's role. In her view, the judicial review required is limited to determining whether the settlement meets basic standards of fairness and reasonableness.
The settlement resolves an SEC lawsuit that alleged Musk delayed publicly disclosing in April 2022 that he had acquired a 5% ownership stake in Twitter. The agency alleged that the disclosure delay permitted Musk to avoid costs that it estimated at $150 million. The case concluded with the agreement approved by the judge on Wednesday.
According to materials filed in the matter, Musk completed a purchase of Twitter for $44 billion roughly six months after the earlier stake disclosure. The SEC initially brought the suit on January 14, 2025, a date noted in filings as being six days before President Joe Biden departed the White House.
Judge Sooknanan previously outlined the considerations she would weigh before granting approval. She said the court must assess whether the settlement is fair to both sides, whether it aligns with the public interest, and whether there is any evidence of improper collusion or corruption affecting the deal. She directed both parties to appear in court on Wednesday and to prepare a timeline for filing briefs to support the settlement.
In filings and public statements, Musk has characterized the lawsuit as politically motivated and has noted his prior role as an adviser to President Donald Trump. He has also maintained that any delay in disclosure was unintentional. The settlement brings the SEC litigation to a close, subject to the terms the judge evaluated under the limited judicial standard.
Context and next steps
With the judge's approval, the SEC matter as framed in the complaint is resolved by the financial settlement. Judge Sooknanan emphasized the limited judicial function in this context and suggested the broader question of whether the regulator adequately held a high-profile individual to account is a matter for public judgment through political processes such as voting.