He also accused the regulator of wasting time when “there are so many real crimes that go unpunished”.
“Musk’s breach resulted in substantial economic harm to investors,” the SEC’s complaint said, external.
In an emailed statement to BBC News, Musk’s lawyer Alex Spiro described the lawsuit as a “fraud” and a “harassment campaign” against his client.
Twitter’s stock price rose more than 27% after Musk publicly announced the stock purchase on April 4, 2022, the SEC said.
Musk eventually bought Twitter for $44 billion in October 2022 and has since changed the platform’s name to X.
The complaint was filed by the SEC in federal court in Washington DC on Tuesday.
The lawsuit also asked the court to order Musk to disgorge “unfair” profits and pay a fine.
The head of the SEC, Gary Gensler, announced in November that he would resign from his post when Donald Trump returns to the White House on January 20.
That was after Trump said he planned to fire Mr. Gensler on “day one” of his new administration.
Under Mr. Gensler’s leadership, the SEC clashed with Musk, who is a close ally of the president-elect.
But Musk had run-ins with the SEC long before Mr. Gensler took office.
In 2018, the regulator accused Musk of defrauding investors by claiming he had “secured funds” for privately held Tesla, the electric car company he runs.
He later settled the charges, stepping down as chairman of the company’s board and agreeing to accept what has been called a Twitter sitter – restrictions on what he can write on social media about the company.
