Elon Musk faces class-action lawsuit over delay in disclosing Twitter investment

midian182

Posts: 8,015   +87
Staff member
What just happened? There's been a lot of controversy surrounding Elon Musk suddenly becoming Twitter's largest shareholder, so this shouldn't come as too much of a surprise. The Tesla boss is facing a class-action lawsuit launched by another shareholder for failing to disclose his stake in the company within the required ten days, thereby affecting its share prices.

A 13G filing earlier this month revealed that on March 14, Musk purchased 73,486,938 Twitter shares, worth about $2.89 billion, giving him a majority 9.2% passive stake in the company. The acquisition was made public on April 4, but federal trade laws require investors who surpass a 5% stake in a company to notify the Securities and Exchange Commission (SEC) within ten days.

By delaying the announcement, Musk was able to buy more Twitter shares at an artificially low price, a move that is estimated to have netted him $156 million.

A proposed class action filed in Manhattan federal court states that "Investors who sold shares of Twitter stock between March 24, 2022, when Musk was required to have disclosed his Twitter ownership, and before the actual April 4, 2022 disclosure, missed the resulting share price increase as the market reacted to Musk's purchases and were damaged thereby."

The suit claims that investors sold shares at "artificially deflated" prices due to Musk's delay—shares jumped 27% to $49.97 when his investment was revealed on April 4. It also states that Musk made "materially false and misleading statements and omissions" by failing to disclose his 5% ownership in time. The suit's plaintiff sold 35 Twitter shares for $1,373, or an average price of $39.23, before Musk revealed his ownership.

Since becoming Twitter's biggest shareholder, Musk has asked followers if Twitter should have an edit button, which it is now getting (though not because of his poll), and whether Twitter HQ should be turned into a homeless shelter. He was set to take a seat on the board of directors but turned it down at the last minute, leaving him free to launch a potential hostile takeover.

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psycros

Posts: 4,238   +6,041
The payout from any successful suit is just a cost of doing business at the level of guys like Musk. It would have to be insanely punitive to really hurt him..and nobody on Wall Street will allow that precedent to be set :)
 

BobDoleStillAliv

Posts: 33   +53
Generally I despise the SEC and like Musk - but Musk appears to have just flat out ignored this legitimate requirement. I can see the reason for the requirement as well. There should be some penalization
 

wiyosaya

Posts: 7,821   +6,789
The payout from any successful suit is just a cost of doing business at the level of guys like Musk. It would have to be insanely punitive to really hurt him..and nobody on Wall Street will allow that precedent to be set :)
I agree. Perhaps the regulators will step in and join the suit - adding on a substantial punitive damage amount to the settlement. The SEC has got to be tired of Musky's antics and his waiving of his middle-finger to them.
Generally I despise the SEC and like Musk - but Musk appears to have just flat out ignored this legitimate requirement. I can see the reason for the requirement as well. There should be some penalization
Yes, it would be wonderful if we could live without the SEC, however, given a$$holes like Musky who abuse their wealth in ways that are meant to line their pockets with even more money, we cannot live without the SEC rules as those rules serve to at least attempt to reign in a$$holes like Musky who will do anything they can think of to give themselves an unfair advantage over everyone else.

IMO, Musky is the consummate trickster, and many bow to him like he is god, when he is really a dog.

IMO, its about time someone did something like this instead of letting Musky get away with his bull$hit.
 

nodfor

Posts: 268   +471
I agree. Perhaps the regulators will step in and join the suit - adding on a substantial punitive damage amount to the settlement. The SEC has got to be tired of Musky's antics and his waiving of his middle-finger to them.

Yes, it would be wonderful if we could live without the SEC, however, given a$$holes like Musky who abuse their wealth in ways that are meant to line their pockets with even more money, we cannot live without the SEC rules as those rules serve to at least attempt to reign in a$$holes like Musky who will do anything they can think of to give themselves an unfair advantage over everyone else.

IMO, Musky is the consummate trickster, and many bow to him like he is god, when he is really a dog.

IMO, its about time someone did something like this instead of letting Musky get away with his bull$hit.
What about Nancy?
 

p51d007

Posts: 3,208   +2,741
Funny how politicians (DIMocRATS) mostly get away with things like this. It's almost like they control the SEC. ;)
 

wiyosaya

Posts: 7,821   +6,789
Funny how politicians (DIMocRATS) mostly get away with things like this. It's almost like they control the SEC. ;)
Funny how Conservaturds hate regulations that outlaw cheating in any form. :heart_eyes:
What about Nancy?
Whataboutism?? 😞😥🤣

Perhaps you should float this as yet another unfounded Conservaturd conspiracy (like that totally debunked one about a pedophile ring in a downtown DC Pizza shop) to "Q"! That's the ticket. 🤣🤣🤣🤣🤣
 

nodfor

Posts: 268   +471
Funny how Conservaturds hate regulations that outlaw cheating in any form. :heart_eyes:

Whataboutism?? 😞😥🤣

Perhaps you should float this as yet another unfounded Conservaturd conspiracy (like that totally debunked one about a pedophile ring in a downtown DC Pizza shop) to "Q"! That's the ticket. 🤣🤣🤣🤣🤣
Putting more smileys won't change the facts. Nobody voted for Musk, yet you libs just love voting for Nancy. And making silly excuses for her.
 

Tantor

Posts: 337   +601
Funny how Conservaturds hate regulations that outlaw cheating in any form. :heart_eyes:

Whataboutism?? 😞😥🤣

Perhaps you should float this as yet another unfounded Conservaturd conspiracy (like that totally debunked one about a pedophile ring in a downtown DC Pizza shop) to "Q"! That's the ticket. 🤣🤣🤣🤣🤣

Is it too much to ask for decent, polite behavior?