A judge has sanctioned a $1.5 million settlement involving Elon Musk, resolving a lawsuit from the U.S. Securities and Exchange Commission, despite expressing considerable reservations about the decision.
U.S. District Judge Sparkle Sooknanan indicated her acceptance of the settlement, as reported by Bloomberg on Wednesday, referencing her court’s written opinion.
This settlement wraps up a lawsuit initiated by the SEC against Musk in early 2025 concerning his management of the Twitter acquisition. The case, launched just days before Donald Trump assumed the presidency, focused on Musk’s delayed disclosure regarding his increasing ownership in the company in 2022.
The SEC pointed out that Musk’s initial failure to make this information public allowed him to avoid a substantial $150 million loss.
In May, Musk reached an agreement with the SEC, which required the establishment of a trust in his name to cover the $1.5 million penalty without him admitting any misconduct.
Sooknanan had earlier voiced concerns about whether Musk was being granted preferential treatment by the Trump administration, noting Musk’s financial support of Trump’s 2024 campaign.
In her opinion, Sooknanan emphasized that her court’s role was “restricted to determining if the proposed consent judgment meets basic standards of fairness and reasonableness,” and whether it “undermines judicial authority.”
“While the Court harbors serious doubts about the settlement reached in this case, it cannot conclude that the settlement meets that stringent threshold,” Sooknanan stated.
