The U.S. Securities and Exchange Commission (SEC) has initiated legal proceedings against Elon Musk, alleging that the billionaire did not reveal his acquisition of Twitter shares within the legally required timeframe in 2022. The timing of this lawsuit has sparked curiosity, as many are taken aback by the delay in its emergence.

The lawsuit, submitted on Tuesday in the District Court of Columbia, centers on Musk’s actions prior to his $44 billion Twitter purchase, a deal he initially approached with reluctance. By March 14, 2022, Musk had acquired enough shares to hold over five percent of the publicly traded entity. According to the Securities Exchange Act of 1934, he was obligated to inform the SEC of this acquisition within 10 days—by March 24, 2022.

Nonetheless, Musk reportedly postponed his disclosure, not notifying the SEC until April 4—11 days after the deadline. During this interval, he allegedly invested over $500 million to acquire more Twitter shares, raising his stake to 9.2 percent. When Musk eventually revealed his purchase, Twitter’s stock price skyrocketed, closing 27 percent higher than the previous day, which increased the value of Musk’s shares to $2.89 billion.

The SEC contends that Musk’s delay permitted him to purchase additional shares at a reduced price, resulting in a savings of at least $150 million. This postponement also negatively impacted other investors who sold their shares prior to the price jump, with the SEC stating they “suffered substantial economic harm.” The regulator is pursuing a penalty and requesting Musk forfeit the profits obtained from the alleged infraction.

Rumors of the SEC probing Musk’s Twitter stock acquisition first emerged in 2022, shortly following the commencement of the deal. Now, it appears the regulator is poised to take action. However, it remains unclear if Musk will regard the lawsuit seriously, given his previous vocal contempt for the SEC.

This is not the sole legal predicament Musk is confronting concerning his delayed disclosure. In 2022, a class-action lawsuit was launched by former Twitter shareholders who sold their stocks during the interval between Musk’s purchase and his announcement. That case is still in progress.