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US SEC Sues Elon Musk for Securities Violation over X
Deutsche Welle
15 Jan 2025, 10:44
Photo: Alain Jocard/AFP [M]
The US Securities and Exchange Commission sued Elon Musk Wednesday for failing to disclose his acquisition of Twitter shares before buying the company.
The SEC said Elon Musk violated securities law by acquiring Twitter shares at "artificially low prices."
Musk bought Twitter in 2022 for about $44 billion (€42.7 billion), changing the name to X the following year.
What does the SEC say in its lawsuit?
The SEC alleged in the lawsuit that Musk committed securities fraud in 2022 by amassing an active stake in Twitter but withheld the information.
Before purchasing Twitter, Musk had built up a position in the company greater than 5% that would have required disclosing his holding to the public.
"Defendant Elon Musk failed to timely file with the SEC a beneficial ownership report disclosing his acquisition of more than five percent of the outstanding shares of Twitter's common stock in March 2022, in violation of the federal securities laws," the SEC said in a court filing.
The SEC said withholding that information allowed Musk "to underpay by at least $150 million for shares he purchased after his financial beneficial ownership report was due."
Musk's power in the Trump government
The news comes a week before President-elect Donald Trump returns to the White House for a second term, with Musk as part of Trump's inner circle.
Musk is set to play a highly influential role in the new government by leading an advisory body — but not a government agency — that will focus in part on reducing regulations.
Musk, who is CEO of Tesla and SpaceX, spent over a quarter of a billion dollars to groups supporting Trump's campaign in 2024.
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7.4 Magnitude Earthquake Hits Vanuatu, Killing 14 and Leaving Thousands Affected
A powerful earthquake of magnitude 7.4 struck Vanuatu’s capital, Port Vila, on Tuesday, causing widespread devastation. At least 14 people have been killed, and over 50 others injured, according to local media and the United Nations. The earthquake also damaged two main water reservoirs and a hospital, leaving critical infrastructure compromised.
Scenes of Destruction
The national broadcaster, VBTC, aired harrowing footage of vehicles crushed under debris from collapsed buildings and boulders blocking major highways. Drone footage revealed landslides near a shipping terminal, underscoring the scale of the disaster. Security camera recordings captured the moment of the quake, showing people fleeing in panic as cars rocked violently.
State of Emergency Declared
Caretaker Prime Minister Charlot Salwai declared a state of emergency on Tuesday evening and announced a seven-day curfew in the worst-affected areas. He described the event as a “sad and devastating time” for Port Vila and expressed condolences to families who had lost loved ones. The government has requested international assistance to cope with the disaster.
Rescue Efforts Underway
Search and rescue teams worked tirelessly into the night to locate survivors trapped under rubble. A police official confirmed ongoing rescue operations in the capital. Port Vila’s hospital reported significant damage, with its operating theatre rendered inoperable. Emergency triage tents have been set up outside to manage the influx of patients.
Widespread Impact
The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) estimates that approximately 116,000 people have been affected by the earthquake. The disruption of communication lines delayed coordination with the National Disaster Management Office until Tuesday evening, when Starlink satellite services were deployed to restore connectivity.
Global Responses and Support
Australian Foreign Minister Penny Wong announced that Australia is preparing to send urban search and rescue teams, along with emergency medical personnel, to assist. New Zealand’s High Commission building in Port Vila, which houses multiple foreign missions, sustained significant damage, including the U.S., British, and French embassies. The U.S. Embassy spokesperson confirmed that all personnel had safely evacuated, though the building suffered "considerable damage."
Fiji’s Prime Minister Sitiveni Rabuka expressed his condolences on social media, calling the disaster “a tragedy that has claimed lives and devastated families in Vanuatu.” Commonwealth Secretary-General Patricia Scotland also voiced concern over the extensive damage and loss of life.
Aftershocks and Tsunami Concerns
The U.S. Geological Survey reported the earthquake at a shallow depth of 10 kilometers (6 miles). Several aftershocks, some strong enough to be felt in Port Vila, followed the initial quake. While a tsunami warning was initially issued, it was later canceled by the U.S. Tsunami Warning System.
Political Context
Vanuatu’s government is currently in caretaker mode ahead of national elections, following the recent dissolution of parliament. This has added to the challenges of responding effectively to the crisis.
A Nation in Mourning
The earthquake has left a lasting scar on Vanuatu’s capital, with thousands reeling from the destruction. As rescue efforts continue and international aid begins to arrive, the resilience of the Vanuatu people will be tested in the days ahead.
Trump Threatens to Impose Additional Tariffs on Indian Goods
US President-elect Donald Trump has threatened to impose additional tariffs on Indian goods even before taking oath. He has also announced similar plans for Brazil.
According to a report by Indian news agency PTI, Trump made these remarks on Tuesday (December 17) while speaking to journalists at his Mar-a-Lago residence.
"If any country imposes excessive tariffs on us, the United States will impose equally high tariffs on their goods," Trump said, referring to India and Brazil. He claimed these countries impose significant tariffs on American products in nearly all sectors, whereas the US has not reciprocated similarly.
Trump emphasized the need for fairness in trade. "If India imposes a 100% tariff on American goods, the U.S. will impose the same rate of tariff on Indian goods. They can impose tariffs on us if they wish, but we will do the same,'' he added.
Earlier, Trump's designated Commerce Secretary Howard Lutnick had made similar statements. He said, "The principle of mutual benefit will be crucial for the new administration. The way you treat us will reflect how we treat you — that's a fair expectation."
On November 5, Donald Trump, the Republican candidate, won the US presidential election, marking a historic return to power. However, he has not yet formally assumed office. Trump is set to be sworn in as the US President on January 20.
Germany: Dresden Opera Visitors Fall Sick
Several opera house visitors in the eastern German city of Dresden had to be treated for nausea and dizziness on Tuesday evening, the cause of which still remained unclear on Wednesday morning.
Three women, aged 62, 66, and 68, said they felt unwell at the end of a concert at the famous Semperoper in the regional Saxony state capital.
Four paramedics who treated the women then also suffered similar symptoms, prompting specialist fire brigade services to be alerted.
What caused the illness?
Air quality tests revealed no measurable quantities of toxic material and oxygen levels were also found to be normal.
Of the seven victims, two were taken to hospital, while local police have opened an investigation into grievous bodily harm.
Opera house visitors and employees were on Wednesday being questioned, but the causes remained unclear.
The concert at the historic Semperoper featured the Saxon State Orchestra, conducted by Philippe Herreweghe, performing works by Joseph Haydn and Wolfgang Amadeus Mozart.
US Responds to Sheikh Hasina’s Alleged Role in Enforced Disappearances
The issue of submitting an interim report on enforced disappearances to Chief Advisor Dr. Muhammad Yunus by the Investigation Commission was raised during a regular press briefing by the US Department of State. The United States welcomed the interim government's initiative to investigate these incidents and encouraged maintaining fairness and transparency in the judicial process.
Speaking at the briefing on Wednesday, December 18, Vedant Patel, Deputy Spokesperson of the US State Department, addressed concerns about enforced disappearances in Bangladesh.
During the session, a journalist questioned the possibility of US sanctions against former Prime Minister Sheikh Hasina over her alleged involvement in enforced disappearances. The journalist referred to a report by The New York Times, which cited findings from the Investigation Commission implicating Sheikh Hasina in such incidents. The journalist also noted that the US had previously imposed sanctions on individuals involved in disappearances in Bangladesh.
In response, Patel expressed serious concern over reports that hundreds of Bangladeshis have been forcibly disappeared over the past two decades. He described enforced disappearances as grave human rights violations causing trauma and mental anguish to victims and their families. He stated, “We welcome the interim government’s efforts to investigate these crimes and encourage a fair and transparent process to ensure justice for the victims and their families.”
Patel reiterated the US’s support for justice through due process and fairness.
Earlier, on Saturday, December 14, the Investigation Commission submitted an interim report to Chief Advisor Dr. Muhammad Yunus. The report presented evidence linking former Prime Minister Sheikh Hasina to orders behind enforced disappearances over the past 15 years. It also recommended dissolving the Rapid Action Battalion (RAB) and initiating judicial proceedings against those involved.
The briefing also touched on the topic of Bangladesh's next general election. A journalist inquired about the US position regarding the announcement of possible election dates in late 2025 or early 2026.
In response, Vedant Patel welcomed the steps taken by the interim government to prepare for elections, emphasizing that these measures would enable the Bangladeshi people to choose their leadership. Patel added, “Determining the timing of elections is an area we will continue to monitor. Throughout the process, we encourage adherence to the rule of law and the implementation of democratic principles. As always, our position remains in favor of free, fair, and peaceful elections conducted transparently.”
Chinese National charged with Acting as Beijing's Agent in Local California Election
A Chinese national was arrested Thursday on charges of acting as an illegal agent for Beijing when serving as the campaign manager for an unnamed politician elected to a city council in Southern California two years ago.
The arrest of Yaoning "Mike" Sun, 64, came at a time of rising concerns that the Chinese government has cultivated a network of operatives to influence local elections in the US to install politicians who are friendly to Beijing and can help promote Chinese interests.
According to a complaint filed Tuesday in the US District Court for the Central District of California, Sun is accused of conspiring with Chen Jun, who was sentenced to 20 months last month for acting as an illegal agent of the Chinese government.
Chen, 71, also a Chinese national, pleaded guilty in July to using Chinese money to bribe federal agents to undermine the anti-Beijing spiritual group Falun Gong. The charge against Sun shows that Chen also conspired to interfere with local elections.
It was not immediately clear if Sun had a lawyer who could speak on his behalf.
Sun was instructed by Chen to write up a report in 2023 to recount to Chinese officials how they helped the local politician get elected, according to the affidavit.
Subsequent writings between the two men described the city councilperson as a "new political star" and included a request for US$80,000 to fund more pro-Beijing activities in the United States, according to the court documents.
Chen asked Sun to list all the mainstream American politicians the city councilperson was familiar with and told Sun that it would be "very effective to elevate" the status of the councilperson in China.
"This case is yet another example of a very disturbing trend: the People's Republic of China is seeking to influence foreign and domestic policy in the United States," Martin Estrada, US attorney for the Central District of California, said in a call with reporters.
"To do so, government officials in China are seeking to help get elected individuals who they see as being friendly to Chinese foreign policy."
The charges against Sun followed those against a former aide to two New York governors in September. Authorities have accused Linda Sun of acting as an illegal agent of the Chinese government and using her positions to subtly advance Beijing’s agenda in exchange for financial benefits worth millions of dollars.
In California, Estrada said Yaoning Sun appeared to be ideologically invested in furthering the interests of the Chinese government in the United States, noting that he had previously served in the Chinese military. The complaint does not specify financial gains for Yaoning Sun, who probably is not related to Linda Sun, as they share a common Chinese name.
In the affidavit, it is alleged that Yaoning Sun, a resident of Chino Hills outside Los Angeles, also ran a media outlet called the "US News Centre" with the councilperson and paid for some of the politician’s travel expenses.
Prosecutors say Sun worked closely with Chen, who appeared to be in regular contact with Chinese officials. Their communications included how to protest a US congressperson's proposed visit to Taiwan, a self-governed island that Beijing sees as part of Chinese territory.
The men discussed how to set up a meeting for the politician to meet with the top Chinese diplomat in Los Angeles and arrange travel plans for the politician to visit China.
Can China Shield the Biggest Uninsured Economy From Floods?
The rivers and canals that meander through Hemudu in southeastern China are a vital source of life and community — they provide income for fishermen, an after-school hangout spot for kids, and define the town’s landscape. But when it rains, those waterways become a liability.
"This area floods every year,” says Zheng, a long-time resident who lives less than a mile away from a river. Over the past decade and a half, Zheng has seen floodwater repeatedly threaten the ground-floor grocery store that he runs and his home above. But with his income "barely enough to make ends meet” and a grandson to look after, the 60-year-old says relocation isn’t an option.
He’s tried but failed to insure his property. "Insurance companies turned us down because they said they'd have no chance to make money,” says Zheng, who asked not to be identified by his full name for fear of reprisal. "No one would take such a risk.”
Zheng is one of hundreds of millions of Chinese citizens whose homes and livelihoods have grown more precarious on a rapidly warming planet. Of the 20 most climate-vulnerable regions, 16 are on Chinese soil. Yet the world’s second-largest economy is among the least insured. Only about 10% of Chinese families have a home insurance policy, according to industry estimates. That figure is nearly 90% in the U.S.
China’s government knows it has to do something about that gap, which Swiss Re AG estimates amounted to $273 billion in uninsured losses over the last decade. Officials first started seriously discussing the need to build an insurance system after the devastating 2008 Sichuan earthquake killed almost 90,000 people and cost an estimated 845 billion yuan ($116 billion). But uptake has been slow, and now climate change is making insurance increasingly unattainable all over the world.
Part of the problem is cultural. Many Chinese people have traditionally relied on the government and family members in times of trouble, rather than market-based financial products. "Insurance as a service has not been widely accepted in China,” says Tian Ling, a professor at Wuhan University’s Economics and Management School. "If it’s up to Chinese individuals, very few people would buy catastrophe insurance. That leaves the government no choice but to purchase it for their citizens.”
As China’s government faces pressure from the public to show it’s taking steps to protect people from more extreme weather, the nation’s top-down economic management style is colliding with an insurance industry upended by global warming. Officials have started buying policies that cover entire cities and provinces. But local authorities are short on cash, meaning the coverage they can afford is far from what’s needed, even as rising climate risks cause premiums to surge. The decade-long initiative, instead, risks downplaying how exposed people really are and could even backfire by making it harder to unlock national funds in times of crisis, since these regions are ostensibly covered by the private market.
In 2014, the government of Ningbo, which oversees Hemudu, stepped in to buy citywide catastrophe insurance to cover residents like Zheng. A typhoon had wreaked havoc on the city the year before, prompting thousands of people to protest what they saw as insufficient disaster relief. It was one of the first experiments in what would eventually become a nationwide trial covering tens of millions of people in 74 cities and 15 provinces.
Unlike Zheng’s failed attempt to buy his own coverage, insurers found the Ningbo government was a client they couldn’t refuse. Participating providers have lowered their prices so the government can afford it because the program is too important to fail, according to people familiar with the arrangement who requested anonymity to discuss private details. Ningbo officials secured a discount of several million yuan on the annual premium for the three-year policy signed in 2021, one of the people said, even though the initial, higher price was based on the city’s growing climate risks calculated using scientific models.
Catastrophe insurance is not a lucrative business in Ningbo, according to an executive at PICC Property and Casualty, a top Chinese insurer that has been part of the program since 2014. "We are not after financial returns,” the executive said, asking not to be identified because they’re not authorized to speak to the media. When it comes to serving the government, "the political consideration outweighs anything else.”
The Ningbo government and PICC did not respond to questions about the catastrophe insurance program.
There is a potential risk for foreign investors backing the Chinese insurers that have been drawn into the programs. PICC has insured catastrophe risks for other provinces including Hebei, Sichuan and Zhejiang. China Life Insurance, Asia’s biggest insurer, has sold policies to Henan’s government and Ping An Insurance Group of China Ltd. is among those supporting the technology hub Shenzhen. All three companies are listed on the Hong Kong Stock Exchange. Citigroup and BlackRock, for example, hold 11% and 6% of PICC’s shares, respectively, according to data compiled by Bloomberg.
Chinese insurers don’t publish detailed profit breakdowns to establish how much these government deals have affected their bottom lines. But their experience in Ningbo in 2015 gives some indication. A consortium led by PICC lost about 56 million yuan due to a string of calamities that year, according to a 2022 analysis done by the insurer, Ningbo University and the local government. The disasters put the program "at risk of bankruptcy,” the authors noted, and "sounded an alarm about its future liabilities.” Yet a growing number of local authorities have struck similar deals with insurers, covering longer periods of time.
Wang He, chair of the China Association of Actuaries, has spent years studying the country’s catastrophe insurance problem. The ongoing local trials aren’t sustainable without broader publicly funded mechanisms to support communities after disaster, he says. "Catastrophe risk management falls within the realm of public management,” says Wang. A lack of understanding of that "public nature” in China has led to "a simplistic approach of delegating the job to the insurance industry, which is ill-equipped to shoulder the entire responsibility."
Without a wider protection system, flood victims like Zheng don’t have much recourse. In 2015, after Ningbo started its catastrophe insurance program, the shopkeeper received the first payout of his life. It was 1,000 yuan ($140), even though the water destroyed thousands of yuan worth of bottled water, snacks and everyday essentials such as toothbrushes that he could no longer sell.
Located about 150 miles south of Shanghai, Ningbo is a land of historic relics and modern skyscrapers. The 7,000-year-old city owes much of its prosperity to the East China Sea, which once helped Ningbo carve out a spot on the ancient Silk Road and continues to make it a vital trading hub. But the bustling coastal region is also a magnet for natural disasters. The city, home to nearly 10 million people, has been battered by more than 40 storms over the last two decades.
While that first payout in 2015 left the insurers who sold the policy in deficit, the government was pleased with the 78 million yuan its residents received. It was almost twice what the government had spent on premiums. The apparent success convinced officials to turn the one-year pilot into a three-year deal. It also turned Ningbo into a shining example of how to deploy catastrophe insurance. Bureaucrats from all over China flocked to the city to learn how to replicate the program at home.
But local governments across the country face the same dilemma as Ningbo. They’re trillions of yuan in debt and grappling with an economic slowdown that's seen China's government add a sweeping package of stimulus measures. There isn’t enough cash to dole out when disaster strikes; even investing in insurance policies can be a stretch. In 2021, when record rain battered Henan province in central China, killing nearly 400 people, relief spending ballooned to 100 million yuan in a matter of days. China said last year that it would issue 1 trillion yuan in special Treasury bonds to raise funds for future calamities.
The central government typically allocates relief funds after an area is hit by destructive weather, but how much trickles down to individual households depends on how local authorities decide the money should be spent. China’s top leaders signalled this month that the nation will increase public borrowing and spending in 2025, but officials have so far been reluctant to directly hand out cash or significantly widen the social safety net. President Xi Jinping has warned against falling into a trap of "welfare” or "feeding lazy people.”
All that makes catastrophe insurance an appealing solution. Still, the policies are pricey because they guard against extreme risks, and premiums are quickly rising as reinsurers brace for higher climate damages. The World Bank estimates that China will lose as much as 2.3% of its economic output to weather perils made worse by global warming by the end of this decade.
The Ningbo Model — as the insurance program was dubbed by the Communist Party mouthpiece People’s Daily — has been held up as a win-win answer because it enlists the private sector to lessen the financial burden on the state and payments are quicker without having to deal with government red tape. But it also has some less appealing characteristics. Unlike traditional insurance, where payouts are commensurate with actual losses, Ningbo has a "parametric insurance” policy that only delivers compensation when certain thresholds are hit. A home inundated with, say, 7 inches of water might not meet the requirement for a payout if the trigger requires floodwaters to reach 7.8 inches.
There’s also a cap on each payment. If their house collapses, a family only stands to receive a maximum payout of 10,000 yuan in a given year. An average house in Ningbo is worth 23,000 yuan per square meter. Since the program started, eligible households have received under 660 yuan each, on average, less than 1% of the annual disposable income of the city’s residents.
The insurers behind Ningbo’s program have gradually raised the upper limit for payouts, but how far they can go comes back to how much the government can afford in premiums. Ningbo is home to China’s second-busiest cargo port and a petrochemical industry worth $72 billion, helping it to weather China’s economic woes better than many of its neighbours. Even so, local officials rejected an informal proposal to turn its current three-year policy into a five-year arrangement, due in large part to concerns over the government’s ability to commit to the program long-term, according to one of the people familiar with the deal.
In recent years, the government has also added clauses to the policy that likely wouldn’t pass muster in the West. Starting in 2021, participating insurers are required to channel a chunk of their underwriting profits to Ningbo’s disaster relief fund if the city avoids major damages during their time of service. That, together with the push to raise compensation levels, has forced the insurers to operate on razor-thin margins, even in good years.
The practice is "not widely used in commercial markets,” says Christopher Au, climate practice lead for Asia Pacific at insurance broker WTW. But because insurers can tap the relief fund under some circumstances if payouts exceed what they’ve collected in premiums, Au says the arrangement can also potentially help spread out their risk and reduce the volatility of profits and losses from year to year.
To keep climate-induced losses at bay, Ningbo has improved its early-warning system for typhoons and moved some residents out of floodplains.
But the insurance program remains a cosmetic addition to the city’s arsenal of protection measures. All told it offers a maximum coverage of 500 million yuan per year for natural catastrophes. A 2022 study published in Nature estimates that climate change will increase the frequency of super typhoons in Zhejiang province, where Ningbo sits, causing damages as high as 36 billion yuan, on average, every eight years by the end of the century.
The intention was always for government-funded insurance to eventually translate into a more robust private market. In theory, as beneficiaries of the public program grew more familiar with the idea of insurance, they would start buying policies of their own. Yet less than 40% of Ningbo residents surveyed for the 2022 analysis expressed interest in purchasing their own catastrophe insurance.
Local governments will likely remain the driving force behind any catastrophe insurance in China for the coming years, says Wang Xujin, executive director of the Insurance Society of China, an industry group. One way to keep premiums manageable for local governments is to scale up the program across the country, spreading risk over vast areas with different climate risks.
That’s easier said than done. For one, some poorer local governments simply don’t have the resources to spare. It will also be extremely difficult to convince officials in lower-risk areas to split the bill with those that are more highly exposed, he says.
There have been attempts within the central government to set up a national catastrophe insurance program, says Wuhan University’s Tian. But none of the talks have borne fruit. "The discussions always circle back to one issue,” she says. "Who pays?”
Wang He, from the China Association of Actuaries, says he’s concluded there’s only one solution. China needs to build a "new national system” that establishes a disaster relief fund for the whole country financed by the central government and other financial instruments such as catastrophe bonds.
Until then, Chinese officials are eager to point to the growing insurance program as evidence that they’re taking action. Ningbo’s government has touted it as a "shock absorber” for the economy that will help boost social stability. In Shiqiao, a canal-side suburb of Ningbo, a tailor surnamed Lin is mollified that the state is at least trying to do something about the constant flooding.
Like Zheng, she also received an insurance payout of 1,000 yuan after waist-deep water inundated her home in 2022 and soaked a stockpile of new solar-powered water heaters she had planned to sell. "The 1,000 yuan is far from enough to cover my losses,” she says. "But it’s better than nothing.”
Source: Bloomberg
China Taken Efforts Consistent with 'Transnational Repression': US
Principal Deputy Spokesperson of the US Department of State, Vedant Patel on Wednesday (local time) about allegations of China's espionage activities in the US, said that a country should obey the local laws when they are operating abroad.
On being asked about what steps was the US taking on China's establishment of Confucius Institutes in US universities, the operation of overseas undercover police stations, and hacking training institutes, Patel said that they are aware of such reports and Chinese activities that amount to transnational repression.
"So I'm certainly not going to get into results, and I certainly wouldn't speak to something like this in specificity. But of course, we're aware of these kinds of reports, and we're certainly aware of the lines of efforts that have been undertaken by the PRC to conduct what we would view as things that would be consistent with transnational repression as it relates to its own people overseas. And our view is that any country abroad should be obeying and obliging with the local law enforcement and local laws, but beyond that, I'm just not going to get into that specifically," he said.
The FBI and the US's Cybersecurity and Infrastructure Security Agency (CISA) on November 13 issued a warning that the breach, initially discovered late last month, has since uncovered a wide-reaching and serious cyber espionage operation.
Investigators now believe that a cyberattack on US telecommunications systems initially thought to be targeting American presidential campaigns, is much more extensive. It is likely part of a broader effort by China to conduct widespread surveillance on the United States, as reported by Voice of America.
In a statement, the two agencies confirmed that their investigation has revealed Chinese-affiliated hackers infiltrated the networks of several US telecommunications companies, potentially gaining access to a vast amount of sensitive data. Furthermore, the hackers appear to have successfully copied information that was requested by US law enforcement through court orders.
