Jul 9, 2026
When Elon Musk agreed in May to pay a civil penalty of just $1.5 million over questions about his purchase of Twitter, it ruffled the feathers of many critics, who wrote off the penalty (which came without any admission of guilt) as pocket change for the world’s richest man.
Now the judge overseeing the case has weighed in and, based on her comments, she appears less than pleased with the outcome as well.
Advertisement
U.S. District Judge Sparkle Sooknanan approved the settlement between Musk and the Securities and Exchange Commission, but questioned if the SEC had done enough to hold Musk accountable.
Thanks for subscribing!
The money news that actually matters.
By signing up, you accept Moneywise Terms of Use, Subscription Agreement, and Privacy Policy.
“A court presented with a consent judgment is not a rubber stamp. But neither is it an ombudsman,” Sooknanan wrote. “Whether the Executive Branch (through the SEC) has done enough to hold Mr. Musk to account for his alleged violation is, like many other issues, for our citizenry to decide at the ballot box.”
Hands tied?
While Sooknanan had reservations about the settlement, she said she was grudgingly forced to accept it.
“This Court is limited to evaluating whether the proposed consent judgment meets minimum standards of fairness and reasonableness, or whether it instead ‘make[s] a mockery of judicial power,’” she wrote. “Although the Court has significant misgivings about the settlement reached in this case, it cannot say that the settlement meets that high threshold. That means that this Court must accept the Parties’ consent judgment.”
The case was filed by the SEC in 2022, when Joe Biden was President. It centered around an 11-day delay by Musk in revealing his previous investments in Twitter before making the purchase. By not disclosing those, the SEC said, he was able to save as much as $150 million in the purchase, which impacted the amount received by other shareholders.
Musk has said the delay was unintentional. He paid $44 billion for Twitter in October 2022.
Must Read
- The ultra-rich use these 5 real estate strategies to build wealth while they sleep — you can start with just $100
- Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?
- Insurance companies profit most from drivers who auto-renew without shopping around. Comparing 100+ quotes takes 2 minutes and costs nothing
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
A one-time deal?
Gary Gensler, who ran the SEC under Biden, left his post soon after the lawsuit against Musk was filed and as Donald Trump took office. Musk, of course, ran Trump’s Department of Government Efficiency and is a Trump ally, despite a falling out between the two after Musk left Washington.
That relationship with Trump was one of the key things critics of the deal focused on. And it didn’t escape the judge’s attention either.
“The court is left to wonder whether the SEC will afford other alleged securities-law violators such solicitude,” Sooknanan wrote. “Or is this a one-time deal designed for Mr. Musk negotiated without the involvement of the SEC lawyers litigating this case?”
The SEC has said the settlement did not result from collusion, and the $1.5 million penalty was the largest of its type.
You May Also Like
- JP Morgan sees gold hitting $6,000/oz before 2027 — and a Gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
Chris Morris is a veteran journalist with more than 35 years of experience at many of the internet's biggest news outlets. In addition to his activities as a writer, reporter and editor, Chris is also a frequent panel moderator and speaker at major conferences, including CES and South by Southwest.
