The delay in disclosure allegedly allowed Musk to buy Twitter shares at prices lower than they might otherwise have been.

According to the SEC, Elon Musk began purchasing Twitter stock in March 2022, surpassing the 5% ownership threshold on March 14. However, he only disclosed this to regulators on April 4, 11 days later than the legal deadline. U.S. law requires investors to notify regulators within ten days of crossing this threshold, a measure designed to ensure market transparency.

By delaying the announcement, the SEC claims Musk gained an unfair advantage, continuing to buy Twitter shares at undervalued prices. His eventual disclosure caused Twitter’s stock price to surge by more than 27%, leaving earlier sellers at a disadvantage. The regulator estimates Musk underpaid by at least $150 million for shares purchased during this period.

The lawsuit seeks to impose a civil fine on Musk and recover profits made from the delayed disclosure. Musk’s legal team, however, has dismissed the case as baseless. His lawyer, Alex Spiro, described the lawsuit as a “harassment campaign” and downplayed the allegations, calling them an administrative oversight related to filing a single form.

This is not Elon Musk’s first clash with the SEC. In 2018, Musk was involved in a case about a Twitter post claiming he had secured funding to take Tesla private. That case was settled with a $20 million fine and conditions requiring Musk to have certain tweets pre-approved by Tesla lawyers.

Musk went on to acquire Twitter, now rebranded as X, for $44 billion in October 2022. But even with the current lawsuit, he is still an influential figure in the business world, with interests spanning Tesla, SpaceX, and other ventures.

In addition, five other companies have been admitted into the Regulatory Incubation (RI) program, a step that SiBAN views as a positive impact toward enhancing Nigeria’s presence in the digital asset industry.

SiBAN believes this regulatory advancement will help establish Nigeria as a front-runner in Africa’s growing digital asset market.

In offering a more defined and rigorous regulatory structure, the SEC aims to strike a balance between encouraging innovation and safeguarding investors.

The ARIP initiative, introduced by the SEC, is designed to bring companies involved in virtual asset activities under a monitored regulatory framework. This allows them to continue operations while adhering to emerging regulations.

A key feature of this program is the regulatory “sandbox,” which enables these companies to test their digital offerings under close supervision. This approach is seen as a way to ensure the safety of consumers and maintain the integrity of the market.

Toritseju Kaka, Chairman of SiBAN’s Caretaker Committee, responded to the development by highlighting the forward-looking approach of the SEC. He noted that by creating a structured pathway for compliance, the SEC is protecting investors and also encouraging innovation within Nigeria’s digital economy.

Kaka noted that these regulatory steps would likely bolster confidence in the digital asset space, attract both domestic and international investments, and contribute to the nation’s economic growth.

While two companies have been granted provisional approvals, other applications are still under review. These will be considered individually and approved if they meet the necessary criteria set out by the SEC.

SiBAN suggested that the SEC could enhance transparency by disclosing the total number of applications received and providing details on future cohorts for new applications.

In ensuring the continued growth of the digital asset market, SiBAN is calling on all players, both local and international, to engage with the SEC’s regulatory framework and ensure full compliance.

The organisation believes that these initiatives open doors for firms to introduce innovative solutions that could reshape Nigeria’s financial industry.

SiBAN, a self-regulatory organisation, is focused on advocating for the responsible adoption of blockchain technology and digital assets in Nigeria. It aims to promote financial inclusion and technological innovation through collaboration, education, and industry advocacy.

Published on the SEC’s website, Friday, this framework responds to a mandate from the Central Bank of Nigeria (CBN), which requires banks to increase their capital to support Nigeria’s $1 trillion economy. 

Under the new CBN capital requirements, international banks must raise their capital base to N500 billion, national banks to N200 billion, and regional banks to N50 billion.

The SEC stated that the framework aims to ensure the capital-raising process is conducted efficiently, transparently, and in a manner that protects all stakeholders’ interests. 

It will serve as a guide for banks, holding companies, and capital market operators in filing applications for capital raises and mergers and acquisitions.

Key objectives of the framework include ensuring full disclosure of material facts in compliance with the Investments and Securities Act 2007, as well as the SEC’s rules and regulations. It also aims to facilitate a proper and timely review of transactions.

According to the SEC, the CBN has mandated this recapitalization programme to strengthen banks’ asset bases and support economic growth in line with the Federal Government’s goal of achieving a $1 trillion economy by 2030. 

The capital market is expected to play a significant role in facilitating this recapitalization, with banks leveraging the market to raise the necessary funds or engage in business combinations.

“As the regulatory institution mandated to regulate and develop the Nigerian capital market, the SEC has the responsibility to ensure a smooth, transparent, and efficient capital-raising process by the banks,” the SEC noted. 

“This framework outlines the guidelines and procedures banks are required to follow to raise capital through rights issuances, private placements, or other approved methods during the 2024-2026 recapitalisation period.”

Applications and documents are to be filed electronically via the website. The SEC will review submitted documents and communicate any observed deficiencies electronically. Incomplete applications will incur a penalty of N1,000,000 and a re-filing fee of N100,000, payable by the issuing house.

For further inquiries or clarification, banks and stakeholders are encouraged to contact the SEC via the dedicated offer application email.

The SEC emphasized that the framework is an excerpt from the existing rules and regulations of the Commission and should be read in conjunction with the relevant provisions of the Investment and Securities Act, 2007, and the SEC’s rules and regulations. The Commission may also require additional documents or information as necessary.

“Where an issuer has already filed necessary documents with the SEC, such as the Memorandum and Articles of Association or certificate of incorporation, the issuer need not refile these documents for subsequent transactions, provided there has been no change since the previous filing,” the SEC stated. 

Affected banks and holding companies must regularize and update their corporate information with the Corporate Affairs Commission (CAC) before applying with the SEC.

The issue, impacting at least 50 Tingo employees, came into effect in March 2024 after a period of three months where employees weren’t paid their salaries.

In January, CEO Dozy Mmobuosi assured employees in a company-wide call that salaries would be settled within four weeks and appealed for their continued service.

These assurances came despite the Securities and Exchange Commission (SEC) filing charges against Tingo in December 2023 for allegedly fabricating its financial statements.

The SEC investigation revealed a discrepancy between Tingo’s reported financials and reality. While the company claimed to have cash reserves exceeding $461 million, its bank accounts held less than $50 million.

Adding to the confusion, some employees received pay raises just weeks after the SEC charges were filed. These raises ranged from 200% to 400%, according to a company executive.

In March, noting “present realities and uncertainties ahead,” Tingo informed staff via email that they would be sent home temporarily until the company could resume salary payments. 

A high-ranking executive, speaking on condition of anonymity, confirmed the furloughs as a necessary step due to the company’s financial struggles. He elaborated that frozen assets and unpaid debts from vendors further exacerbated the situation.

Tingo Group has not responded to requests for comment regarding the unpaid salaries but instead invited media to a product launch event for its subsidiary, Tingo Foods. This upcoming launch of new beverages has left former employees questioning the company’s priorities.

This incident is the second round of staff reductions for Tingo in 2024. In February, approximately 40 contract workers were abruptly let go without receiving payment for services rendered.