A US federal judge has reluctantly approved a $1.5 million settlement between Elon Musk and the Securities and Exchange Commission (SEC), ending a case over Musk's failure to disclose his 2022 purchase of a 9 percent stake in Twitter within the legally required 10 days. District Judge Sparkle Sooknanan said she had "significant misgivings" about the deal and identified "red flags" in the SEC's decision-making, having previously questioned whether it was tainted by corruption. However, she ruled that the legal bar for rejecting such a settlement is high and the case did not meet that threshold, meaning the court was obliged to accept it. The matter, she said, was one for citizens to judge "at the ballot box".

The original Biden-era lawsuit alleged that Musk's non-disclosure let him keep buying shares at artificially low prices, underpaying Twitter investors by at least $150 million. The judge noted the $1.5 million penalty amounts to roughly 1 percent of what was potentially at stake, and that the SEC dropped its earlier demand for disgorgement, so allegedly harmed investors will not be compensated. She also criticised an unusual arrangement in which a revocable trust — with Musk as sole trustee and beneficiary — pays the penalty in his place, without any admission of wrongdoing, allowing Musk to claim he was cleared. The SEC said the deal followed over a year of negotiations and that Musk himself requested the trust substitution.