WASHINGTON, D.C. — U.S. District Judge Sparkle Sooknanan on May 13, 2026, ordered attorneys for the Securities and Exchange Commission and Elon Musk to appear before her in Washington to discuss approval of their $1.5 million settlement over Musk's delayed disclosure of his Twitter shares. The settlement resolves an SEC lawsuit accusing Musk of waiting too long to disclose his buildup of Twitter shares in 2022.

At the hearing, attorneys for both sides argued for approval of the agreement. Sooknanan said she must weigh several factors before signing off, including fairness to both sides, consistency with the public interest, and whether the deal is "tainted by improper collusion or corruption."

The judge pointed to changes the SEC made in the proposed resolution. The agency removed Musk as a defendant and replaced him with a legal trust bearing his name, and it dropped demands for the return of $150 million in allegedly ill-gotten gains. The settlement reduced the total amount the SEC sought by 99%.

"That's a red flag to me," Sooknanan said of the restructured deal. "Given all the irregularities I have noted, I have concerns," she said.

The SEC sued Musk on January 14, 2025, alleging that he saved $150 million by delaying disclosure of his 5% stake in Twitter in April 2022. Musk purchased Twitter for $44 billion in October 2022. He has said the delayed disclosure was inadvertent and, as a former adviser to President Donald Trump, has claimed the lawsuit was politically motivated.

Under the proposed terms, Musk would not be required to admit wrongdoing or to return the $150 million he allegedly saved. The $1.5 million penalty would still represent the largest in SEC history for the type of violation he was accused of.

The hearing took place as the Trump administration curtailed some types of corporate enforcement activity and SEC Chairman Paul Atkins refocused the agency's priorities. Former SEC enforcement chief Margaret Ryan left abruptly in March after six months on the job, having clashed with agency leaders over the direction of the enforcement program.