Washington: The US Securities and Exchange Commission (SEC) and Elon Musk are working toward a potential settlement in a lawsuit over the late disclosure of stock purchases in Twitter, the social media company now known as X.

According to Anadolu Agency, the SEC and Musk's lawyers submitted a filing on Tuesday to the district court in Washington. The parties stated that they had met and held consultations, engaging in discussions over a 'potential resolution' that could render further court proceedings unnecessary.

The filing requested the court extend the deadline for submitting a joint status report by two weeks, to April 1, to facilitate ongoing talks. The SEC initiated the lawsuit against Musk last January concerning his purchases of shares in Twitter, now known as X and owned by the tech billionaire.

The lawsuit alleged Musk violated federal securities laws by failing to timely file a report with the SEC disclosing his acquisition of more than 5% of Twitter's shares in March 2022. The SEC argued that this allowed Musk to continue purchasing shares at lower prices, resulting in an underpayment of at least $150 million.

It was also stated that during the period Musk delayed the disclosure, investors sold Twitter shares at artificially low prices, suffering significant economic harm. The SEC has asked the court to order Musk to pay a civil penalty and disgorge the alleged ill-gotten gains from his stock purchases.