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Billionaire Elon Musk President Trump is trying to dismiss a lawsuit filed by former Twitter shareholders that claims he waited too long to disclose his ownership stake in the company before buying it and taking it private.
Musk said in a Manhattan federal court filing late Wednesday that “all indications” point to delays in making government-mandated disclosures. Securities and Exchange Commission (SEC) Rules. The proposed class action lawsuit was filed by an Oklahoma public pension fund representing firefighters.
He argued that it was unlikely he intended to deceive shareholders because shareholders who were unaware at the time that he had acquired 9.2% of Twitter’s shares sold their own stock, resulting in them missing out on huge profits.
The investors who filed the lawsuit said Musk and his investment manager, Jared Birchall, knew that SEC rules required them to disclose that Musk had acquired more than 5% of Twitter shares by March 24, 2022, but waited an additional 11 days despite that requirement.
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Musk belatedly disclosed that he had acquired more than 5% of Twitter’s outstanding shares, triggering an SEC investigation and a proposed class action lawsuit. (Apu Gomez/Getty Images)
They argue that the delay allowed Musk to buy more shares at a cheaper price, saving him more than $200 million.Twitter, which rebranded to X after Musk’s acquisition, saw its shares rise 27% on April 4, 2022, after Musk revealed that he owned a 9.2% stake.
In the filing, Musk said he had intended to go public with Twitter shares at the end of 2022, but realized he had misunderstood and went public sooner. SEC Disclosure Rules.
“This was not a fraudulent scheme,” Musk said. “All the evidence, including that in the complaint, indicates it is false.”
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Musk recently agreed to be interviewed by the SEC about his Twitter stock purchase. (Chesnot/Getty Images)
He also said that an anonymous Morgan Stanley banker Transaction Scheme Buying up Twitter shares at “artificially inflated prices” without warning the market at large.
The SEC is also investigating Musk’s 2022 purchase of Twitter shares.
Musk had previously attempted to dismiss the regulator’s investigation and refused to meet with the SEC in September 2023, but in late May he agreed to testify about the matter before the SEC on an undisclosed date.
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Musk said his delay in disclosing his Twitter purchase was due to a misunderstanding of SEC rules, and that he disclosed the information immediately after realizing his mistake. (Thraven Vlasic/The New York Times/Courtesy of Getty Images)
Musk’s ownership group ultimately I bought Twitter It will be acquired for $44 billion in October 2022 and taken private.
A legal battle ensued, in which Musk tried to back out of the deal, citing a large number of spam and bot accounts found during due diligence, and Twitter sued Musk to enforce the deal, but Musk backed down and went ahead with the deal before a trial could begin.
Reuters contributed to this report.
