A federal judge has decisively rejected Elon Musk’s bid to relocate a high-stakes SEC lawsuit from Washington, D.C. to Texas, dealing a significant blow to the billionaire’s legal venue change strategy in his ongoing battle with securities regulators.
Court Rejects Venue Transfer
U.S. District Judge Sparkle Sooknanan ruled Thursday that Musk failed to demonstrate sufficient grounds to move the Securities and Exchange Commission’s case away from the Washington D.C. court where it was originally filed.
In her 16-page decision, Judge Sooknanan acknowledged Musk’s convenience concerns but emphasized his substantial resources and global presence.
“The Court takes Mr. Musk’s convenience seriously, but it also notes that Mr. Musk has considerable means and spends at least forty percent of his time outside his chosen forum,” Sooknanan wrote.
The judge pointedly noted that despite Musk’s claims of rarely visiting Washington, his own legal briefs indicated he had spent substantial time in the district during 2025, particularly while leading the Department of Government Efficiency.
Background of the SEC Case
The SEC lawsuit stems from Musk’s 2022 acquisition of Twitter stock, which he later purchased for $44 billion and rebranded as X. The Securities and Exchange Commission filed the case in January 2025, alleging that Musk violated federal disclosure requirements by failing to report his growing Twitter ownership within the mandated timeframe.
Federal securities law requires investors to disclose beneficial ownership within ten days of crossing the 5% threshold in a publicly traded company. However, the SEC claims Musk delayed his Twitter stake disclosure by 11 days, finally reporting his 9.2% position on April 4, 2022 – well after he was legally required to do so. This delay allegedly allowed him to continue purchasing shares at “artificially low prices” while depriving other investors of material information about his intentions.
Financial Impact and Allegations
The SEC contends that Musk’s delayed disclosure enabled him to acquire more than $500 million worth of additional Twitter shares at below-market prices, ultimately saving approximately $150 million at the expense of unsuspecting shareholders. When Musk finally disclosed his stake on April 4, 2022, Twitter’s stock price surged 27% in a single trading day, demonstrating the market impact of his previously undisclosed position.
“Musk’s conduct undermined the transparency and fairness of the securities markets,” the SEC argued in its filings, emphasizing that “the violation is clear, and the consequences for shareholders were significant”. The agency is seeking civil penalties and demanding that Musk forfeit the $150 million in alleged unjust gains.
Musk’s Defense Strategy
Musk’s legal team has characterized the lawsuit as “a sham” and “a campaign of harassment” while attempting multiple procedural maneuvers to challenge the case. In his venue transfer request, Musk described himself as an “incredibly busy individual” working over 80 hours per week, arguing that defending the case in Washington would create “substantial burdens”.
His attorneys also proposed alternative venues including Manhattan, where former Twitter shareholders have filed separate litigation, but Judge Sooknanan rejected this suggestion as well. The defense has filed a motion to dismiss the entire case, claiming Musk’s disclosure delay was inadvertent and caused no meaningful harm.
The ruling ensures the case remains in Washington D.C., where the SEC is headquartered and much of the agency’s investigative work was conducted, potentially providing procedural advantages for regulators as they pursue one of the most high-profile securities cases in recent years.
