Former securities officials and professors said Musk may have missed a key disclosure deadline when he bought 9% of Twitter.
And Securities and Exchange Commission regulators could use any shortfall to try to punish Musk more for other lapses, some believe.
Musk on Monday disclosed that he bought a 9.2% stake in Twitter Inc (TWTR.N), making him the micro-blogging site's largest shareholder and triggering a rise of more than 27% in the company's shares.
U.S. securities law requires disclosure within 10 days of acquiring 5% of a company, which in Musk's case would be March 24.
A late report could lead to per-violation civil penalty of up to $207,183, when adjusted for inflation, according to Urska Velikonja, a law professor at Georgetown University Law Center.
That's a financial slap on the wrist for Musk, the world's richest person with $302 billion net worth, according to Forbes
The SEC is also investigating Musk's Nov. 6, 2021, tweet asking his followers whether he should sell 10% of his Tesla stake.
The regulator reached a 2018 deal for Musk to get preapproval on some of his tweets, following a Musk tweet that he had "funding secured" to take Tesla private.
The SEC said last month it has told Musk’s and Tesla’s counsel that staff are conducting an investigation relating to potential federal securities law violations.
Twitter stocks have surged since mid-March when Musk purchased his stake.
Musk's stake, valued at around $2.4 billion at the closing price of March 14, jumped to $3.7 billion as of Monday's closing price.