Elon Musk sued by shareholders over delay in disclosing Twitter stake
![](https://cdn.classfmonline.com/cfoZ41e/imagelib/thumbs/14993284.jpg)
Elon Musk was sued on Tuesday by former Twitter Inc (TWTR.N) shareholders who claim they missed out on the recent run-up in its stock price because he waited too long to disclose a 9.2% stake in the social media company.
In a proposed class action filed in Manhattan federal court, the shareholders said Musk, the chief executive of electric car company Tesla Inc (TSLA.O), made "materially false and misleading statements and omissions" by failing to reveal he had invested in Twitter by March 24 as required under federal law.
Twitter shares rose 27% on April 4, to $49.97 from $39.31, after Musk disclosed his stake, which investors viewed as a vote of confidence from the world's richest person in San Francisco-based Twitter.
Former shareholders led by Marc Rasella said the delayed disclosure let Musk buy more Twitter shares at lower prices, while defrauding them into selling at "artificially deflated" prices.
The lawsuit seeks unspecified compensatory and punitive damages.
A lawyer for Musk had no immediate comment. Tesla is not a defendant.
U.S. securities law requires investors to disclose within 10 days when they have acquired 5% of a company, which in Musk's case would have been March 24. read more
Twitter announced on April 5 that Musk would join its board of directors, but this week said he had decided not to. read more
By not joining the board, Musk, a prolific Twitter user, can keep buying shares without being bound by his agreement with the company to limit his stake to 14.9%.
Some analysts have suggested Musk could push Twitter to make changes, or even pursue an unsolicited bid for the company.
Rasella said he sold 35 Twitter shares for $1,373, or an average price of $39.23, between March 25 and 29. Musk is worth $265.1 billion, according to Forbes magazine.
The case is Rasella v Musk, U.S. District Court, Southern District of New York, No. 22-03026.
Source: Reuters
Trending News
Service Ghana Auto Group linked to Akufo-Addo’s daughters – Ablakwa
12:23Dampare expresses gratitude to Police officers who provided security for AU summit
08:01Sack Defence Minister over dissipation of our stool lands – La youth to Akufo-Addo
11:03E/R: NDC suspends Afram Plains North member Kpeli Worlase for misconduct
07:52NDC to launch manifesto in August
12:56A/R: Justice for All Programme uncovers wrongful imprisonment at K’si Central Prisons
07:47Zipline shares impact report on 5 years of operations in Ghana
10:53Meta removes 63,000 Instagram accounts in Nigeria over ‘sextortion’ scams
09:48Akufo-Addo advocates transparency in Judiciary as he swears in 16 Appeal Court judges
02:48Any attempt to illegally freeze our salaries would lead to legal action – CETAG
10:11