By Bill Alpert

A federal district judge refused on Tuesday Elon Musk's request to dismiss a government lawsuit over Musk's late filings with the U.S. Securities and Exchange Commission as he accumulated Twitter stock in 2022.

Musk's lawyers argued that a 55-year old securities law violates the right to free speech by requiring disclosure of company stock accumulations. He also argued that the SEC itself was unconstitutional.

U.S. District Judge Sparkle L. Sooknanan will allow the SEC to proceed in the civil suit, which is asking for $150 million in disgorgement from Musk.

If it infringed free speech for the SEC rule to require potential corporate acquirers to disclose their 5% stake in a stock, then most financial disclosure requirements would fail muster, the judge said. The rule serves an important purpose, the judge said, in preventing stealthy takeovers on the cheap.

As for the agency's overall constitutionality, the judge said Musk cited no supportive cases and had not adequately briefed the issue.

Musk's lawyers didn't immediately respond to a request for comment.

Write to Bill Alpert at william.alpert@barrons.com

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February 03, 2026 20:50 ET (01:50 GMT)

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