GoKawiilA federal judge reluctantly approved a $1.5 million settlement between Elon Musk and the Trump administration despite raising numerous concerns about a deal that lets Musk get off lightly for a rule violation that allegedly harmed Twitter investors.
In an order approving the deal, US District Judge Sparkle Sooknanan said she “has significant misgivings about the settlement” between Musk and the Securities and Exchange Commission (SEC), and described “red flags” in the SEC’s decision-making. This isn’t surprising given that she previously questioned whether the deal is tainted by corruption. But there is a high legal bar for rejecting the settlement, and the circumstances do not meet “that high threshold,” she wrote yesterday.
“That means that this Court must accept the Parties’ consent judgment,” Sooknanan, a Biden appointee, 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.”
The settlement ends a lawsuit the Biden-era SEC filed after Musk purchased a 9 percent stake in Twitter in 2022 and failed to disclose it within 10 days as required under US law. The SEC investigated for nearly three years and finally sued Musk in January 2025, in US District Court for the District of Columbia, just before Biden left the White House.
The lawsuit alleged that by not disclosing the stock purchases before the legal deadline, Musk was able to keep buying shares at artificially low prices and underpay Twitter investors by at least $150 million for those shares. Musk went on to buy the entire company later in 2022.