Elon Musk’s Twitter play blatantly flouts the rules, but will the billionaire get away with it?

We now face the prospect of the world’s richest person, Elon Musk, actively running the world’s biggest social media platform, Twitter, after a significant development on Tuesday.

A day after he described the 9.2% stake he had bought in Twitter as passive investor, the Telsa CEO changed the form for the original filing and now classes himself as an activist shareholder. The amendment came shortly after Twitter appointed Musk to its board on Tuesday.

It raises the question — did he deliberately misclassify himself?

Musk now admits that he invested in the company with the goal of effecting change and that his stock purchases began months ago, in late January. His original filing was what’s called a “13G form” from the US Securities and Exchange Commission (SEC) which suggests the investment was passive, meaning he would not seek to change the company.

But on Tuesday afternoon he made a new filing — a “13D form” that is more often used by activist investors. That filing detailed an agreement Musk reached with the social media firm earlier in the day.

The new filing requires more disclosure, and shows that Musk began accumulating Twitter stock on January 31, with the purchase of more than 620,000 shares. Musk then purchased the shares in every available trading session until April 1, with total daily shares purchased ranging from 371,075 on February 15 to more than 4.8 million shares on February 7.

The SEC requires that investors disclose when they have purchased more than 5% of a company’s stock on one of the two forms within 10 calendar days of hitting that threshold.

Musk admitted on the first form he filed that he had passed that threshold on March 14, but did not disclose the purchases until Monday of this week (April 4), missing the deadline by more than a week.

Twitter announced Tuesday morning that Musk would take a board seat in exchange for agreeing not to push his stake in the company to 15% or higher. The same information is reflected in Tuesday’s SEC filing from Musk.

Twitter shares are up nearly 30% since Musk first disclosed his stake in the company. Those gains have added more than $9 billion to Twitter’s market value at just over $US40 billion.

We now have a situation where the world’s richest man has flouted stockmarket disclosure rules at will, even though he is a proponent of freedom and speech but not a believer in transparency and equality. One rule for him and another rule for everyone else.

After acquiring his stake at the end of January (originally his first disclosure wrongly suggested March 14 was the start date), Musk has spent weeks influencing discussions around the future of Twitter — its algorithm, how it polices speech, and even whether a “new platform” was needed — all without disclosing that he was a part-owner and in talks to join the board.

In many respects Musk is a rich Donald Trump which makes him far more dangerous.

US media, politicians and business people are now watching if the SEC — under its activist head, Gary Gensler — will take on Musk and prosecute him for his woeful and wrong and misleading disclosure of his buying and lack of transparency.

That could be a far more telling controversy than anything Donald Trump tried with Twitter and regulators (he was almost untouchable until the end).