Musk’s push to transfer SEC probe of Twitter deal to Texas rejected by Federal judge
A federal judge has rejected Elon Musk’s appeal to transfer the case of the Securities and Exchange Commission’s (SEC) legal inquiry into the timing of his Twitter stake announcement to Texas.
Elon Musk has faced legal scrutiny from regulators in both the U.S. and the UK over the management of his companies. In the latest development, a U.S. judge has rejected his request to move an SEC lawsuit from Washington, D.C., to Texas.
SEC’s case against Musk
A federal judge has rejected Elon Musk’s attempt to transfer a U.S. Securities and Exchange Commission (SEC) lawsuit to Texas, keeping the high-stakes case in Washington, D.C.
U.S. District Judge Sparkle Sooknanan ruled Thursday that Musk failed to show sufficient grounds to move the case away from Washington. He also insisted that the billionaire maintains a broad presence across states and abroad, even though Musk spends much of his time in Texas, where Tesla and SpaceX have their headquarters.
“The Court takes Mr. Musk’s convenience seriously, but it also notes that Mr. Musk has considerable means and spends at least forty percent of his time outside his chosen forum,” Sooknanan wrote. “Indeed, although Mr. Musk may have ‘rarely’ traveled to this District in recent months, Mr. Musk’s brief itself indicates that he has spent substantial time here this year.”
The SEC lawsuit started in January 2025, more than two years after Musk acquired Twitter, now rebranded as X, for $44B. The regulator is looking to prove that the SpaceX founder violated disclosure rules when he quietly stacked more than 5% of Twitter’s stock in early 2022 before going public with his stake and subsequent takeover.
Federal securities law requires investors to file a special disclosure within ten days of surpassing a 5% threshold in a publicly traded company. According to the SEC, Musk delayed filing the paperwork, which allowed him to buy additional shares at lower prices and deprived other investors of material information.
The SEC claims that the timing of Musk’s stake disclosure in April 2022, after he had become Twitter’s largest shareholder, cost other shareholders over $150M.
“Musk’s conduct undermined the transparency and fairness of the securities markets,” the SEC argued in its filings. “The violation is clear, and the consequences for shareholders were significant.”
Musk’s legal team, however, has dismissed the suit as baseless and politically motivated. In August, they filed a motion to dismiss, calling the case “a waste of this court’s time and taxpayer resources.” The attorneys are insisting that Musk’s actions caused no meaningful harm and that the SEC is pursuing a personal vendetta against him.
SEC refuses to concede home-field advantage
In addition to challenging the lawsuit’s validity, Musk asked for the case to be relocated to Texas, where he has moved much of his business empire. His lawyers argued that forcing him to fight the SEC in Washington, the agency’s home turf, would be unfair.
“Forcing Mr. Musk to litigate in this district would merely perpetuate and compound the harm from the SEC’s years-long campaign against him,” Musk’s attorneys wrote in their motion.
The judge was not persuaded. Sooknanan emphasized that Musk’s wealth and global travel schedule demolish his claims of inconvenience. She also noted that Washington, D.C., is the logical venue since the SEC is headquartered there and much of the agency’s work on the case has been conducted in the capital.
The ruling keeps the case in the same district where Musk has previously sparred with regulators and also ensures that the proceedings remain close to the SEC’s leadership and legal staff, who have clashed with Musk multiple times over the past decade.
Keeping the case in Washington may provide a procedural advantage for the SEC and expedite a resolution.
Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.
You May Also Like
Top NYC Book Publishing Companies
Sensorion Announces its Participation in the Association for Research in Otolaryngology ARO 49th Annual Midwinter Meeting
