Despite ‘misgivings,’ judge approves Elon Musk’s $1.5M SEC settlement

In Brief

A judge has approved a $1.5 million penalty levied against Elon Musk that will settle a U.S. Securities and Exchange Commission lawsuit despite having “significant misgivings” about it.

U.S. District Judge Sparkle Sooknanan noted that her court would accept the settlement, Bloomberg reported Wednesday, which cited her court opinion.

Sooknanan’s approval settles a lawsuit filed by the SEC against Musk in early 2025 over how the billionaire handled his takeover of Twitter. The lawsuit, which was filed only days before Donald Trump took office, revolved around Musk’s failure to disclose to public investors, in a timely manner, his growing stake in the company in 2022.

The fact that Musk did not initially disclose his stake “ultimately saved him a whopping $150 million,” the SEC argued.

In May, Musk reached a settlement with the SEC that stipulated a trust in Musk’s name would be responsible for paying a $1.5 million penalty without admitting wrongdoing.

Sooknanan previously questioned whether Musk was receiving “special treatment” from the Trump administration. Musk helped to bankroll Trump’s campaign during the 2024 presidential race.

In her opinion, Sooknanan noted that her court was “limited to evaluating whether the proposed consent judgment meets minimum standards of fairness and reasonableness,” or whether it “make[s] a mockery of judicial power.”

“Although the Court has significant misgivings about the settlement reached in this case, it cannot say that
the settlement meets that high threshold,” Sooknanan wrote.

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