A U.S. judge signed off on Elon Musk paying $1.5 million to end a Securities and Exchange Commission lawsuit that accused him of cheating Twitter Inc. investors when he missed a deadline in 2022 to disclose his growing stake in the company.

U.S. District Judge Sparkle Sooknanan’s approval comes after she said in May that the deal raised “red flags” — including whether the world’s richest person was getting “special treatment” from the Trump administration.

She continued to express skepticism Wednesday, saying the court would accept the settlement “despite its significant misgivings.”

“In approving the parties’ proposed consent judgment, the court stresses that its role is limited,” Sooknanan wrote.“That means that the court may not step in the shoes of the SEC, notwithstanding that the SEC’s decision-making in this case raises red flags.”

The SEC sued Musk in January 2025, days before President Donald Trump took office, alleging that the billionaire blew a deadline in 2022 to file a disclosure that he accumulated a 5% ownership stake in Twitter.

The SEC said in the suit that failing to reveal his holdings in the social media company meant Musk could secretly amass shares on the cheap. That delay cost Twitter shareholders more than $150 million, the regulator said at the time.

Musk later bought the company and renamed it X.

At the time the suit was filed, Musk was a key Trump ally who had donated hundreds of millions of dollars to help him get elected in 2024. Musk then took on a prominent role in Trump’s administration overseeing a restructuring of the federal workforce but later had a public falling out with the president.

Weeks before the suit was filed, SEC attorneys in December 2024 asked Musk to pay more than $200 million to settle the allegations, according to a letter his lawyers sent to the agency that was reviewed by Bloomberg News.

An SEC spokesperson said in May that a $1.5 million settlement would be a record penalty for a late disclosure of securities holdings, while Musk’s attorney called it a “small fine.”

(With assistance from Zoe Tillman.)

©2026 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.