*

SEC says Musk profited at other investors' expense

*

Musk's lawyer says billionaire did nothing wrong

*

Musk has suggested disclosure delay was a mistake

(Adds details from complaint, additional comment from Musk

lawyer in paragraph 9, background from paragraph 12, case

citation in paragraph 22)

By Jonathan Stempel

Jan 14 (Reuters) - Elon Musk was sued on Tuesday by the

U.S. Securities and Exchange Commission, which accused the

world's richest person of waiting too long to disclose in 2022

he had amassed a large stake in Twitter, the social media

company he later bought.

In a complaint filed in Washington, D.C. federal court, the

SEC said Musk violated federal securities law by waiting 11 days

too long to disclose his initial purchase of 5% of Twitter's

common shares.

An SEC rule requires investors to disclose within 10

calendar days, or by March 24, 2022 in Musk's case, when they

cross a 5% ownership threshold.

The SEC said that at the expense of unsuspecting investors,

Musk instead bought more than $500 million of Twitter shares at

artificially low prices before finally revealing his purchases

on April 4, 2022, by which time he owned a 9.2% stake.

Twitter's share price rose more than 27% following that

disclosure, the SEC said.

Tuesday's lawsuit seeks to force Musk to pay a civil fine

and disgorge profits he didn't deserve.

Musk eventually purchased Twitter for $44 billion in October

2022, and renamed it X.

Alex Spiro, a lawyer for Musk, in an email called the SEC

lawsuit the culmination of the regulator's "multi-year campaign

of harassment" against his client.

"Today's action is an admission by the SEC that they cannot

bring an actual case," he said. "Mr. Musk has done nothing wrong

and everyone sees this sham for what it is."

Spiro added that the lawsuit addresses a mere "alleged

administrative failure to file a single form--an offense that,

even if proven, carries a nominal penalty."

OTHER LAWSUITS OVER TWITTER PURCHASES

Musk, an adviser to U.S. President-elect Donald Trump, is

worth $417 billion according to Forbes magazine, through

businesses such as the electric car maker Tesla and

rocket company SpaceX.

He is worth nearly twice as much as Amazon.com ( AMZN )

founder Jeff Bezos, the world's second-richest person at $232

billion, Forbes said.

The SEC sued Musk six days before Trump's Jan. 20

inauguration.

SEC Chair Gary Gensler is stepping down that day, and Paul

Atkins, who Trump nominated to succeed him, is expected to

review many of Gensler's rules and enforcement actions.

Musk has also been sued in Manhattan federal court by former

Twitter shareholders over the late disclosure.

In that case, Musk has said it was implausible to believe he

wanted to defraud other shareholders, and that "all indications"

were that his delay was a mistake.

Musk has long feuded with the SEC, including after it sued

him in 2018 over his Twitter posts about possibly taking Tesla

private and having secured funding to do so.

He settled that lawsuit by paying a $20 million civil fine,

agreeing to have Tesla lawyers review some Twitter posts in

advance, and giving up his role as Tesla's chairman.

The SEC also sought sanctions from Musk after he missed

court-ordered testimony last September for the Twitter probe, so

he could attend the launch of SpaceX's Polaris Dawn mission at

Florida's Cape Canaveral.

A federal judge in San Francisco rejected that request,

because Musk later testified and agreed to pay the SEC's travel

costs.

The case is SEC v Musk, U.S. District Court, District of

Columbia, No. 25-00105.