A federal judge in Washington, DC, approved a settlement between the Securities and Exchange Commission (SEC) and Elon Musk concerning the timing of his disclosure of Twitter share purchases, despite voicing serious concerns about the agreement.

District Judge Sparkle Sooknanan authorized the settlement on Wednesday, noting that her role was limited to determining whether the resolution met basic legal standards of fairness and reasonableness. However, she highlighted what she described as “red flags” surrounding the case and questioned whether the terms allowed the billionaire entrepreneur to avoid appropriate accountability. Judge Sooknanan, appointed by President Joe Biden, suggested that the outcome might reflect leniency linked to the previous Trump administration’s handling of similar cases.

The settlement resolves SEC claims that Musk failed to disclose his acquisition of Twitter shares promptly in 2022, specifically that he took 11 days longer than permitted under securities law to notify regulators. Under the agreement, a trust bearing Musk’s name is required to pay $1.5 million to settle the charges.

The SEC had alleged that Musk’s delayed disclosure hindered market transparency regarding his stake in the social media company during that period. The commission’s enforcement action aimed to reinforce the importance of timely public reporting by major shareholders, which helps maintain fair trading conditions.

Musk, the world’s richest individual, has faced scrutiny in the past over disclosure practices and regulatory compliance. While the settlement avoids prolonged litigation and potential heavier penalties, some observers view the relatively modest financial penalty and swift resolution as indicative of the complexities involved in enforcement against high-profile figures.

The case underscores ongoing debates about securities regulation and the enforcement challenges when dealing with influential market participants. Although the judge approved the consent decree, her remarks signal judicial awareness of the broader implications surrounding transparency and accountability in financial markets.