In a recent filing in Manhattan federal court, X chAviator Elon Musk has asked to dismiss a lawsuit filed by former Twitter shareholders who allege Musk delayed disclosing his significant stake in the social media company until early 2022.
Musk argued that “all indications” point to his delay being an unintentional error and not an attempt to defraud shareholders.
The proposed class action lawsuit claims that Musk and his estate manager, Jared Birchall, were aware of the U.S. Securities and Exchange Commission (SEC) rule requiring Musk to disclose his 5% stake in Twitter by March 24, 2022. However, they waited 11 more days to do so.
Investors argued that this delay allowed Musk to buy more shares at lower prices, resulting in savings of over $200 million. Following Musk’s disclosure of his 9.2% stake on April 4, 2022, Twitter’s share price rose by 27%.
In his defense, Musk said he had planned to disclose his Twitter stake in late 2022 but did so too quickly after realizing he had misinterpreted the SEC’s disclosure rule.
“This is not a fraud scheme,” Musk said. “All indications, including those in the allegations, point to an error.”
Musk also refuted investors’ claim that an unnamed Morgan Stanley banker helped develop a trading strategy to accumulate Twitter stock without alerting the broader market.
Last September, U.S. District Judge Andrew Carter declined to dismiss an earlier version of the lawsuit, citing evidence that Musk understood the SEC’s information and had testified about it under oath. The case, titled Oklahoma Firefighters Pension and Retirement System v Musk et al, is pending in the U.S. District Court for the Southern District of New York.
Musk argued that “all indications” point to his delay being an unintentional error and not an attempt to defraud shareholders.
The proposed class action lawsuit claims that Musk and his estate manager, Jared Birchall, were aware of the U.S. Securities and Exchange Commission (SEC) rule requiring Musk to disclose his 5% stake in Twitter by March 24, 2022. However, they waited 11 more days to do so.
Investors argued that this delay allowed Musk to buy more shares at lower prices, resulting in savings of over $200 million. Following Musk’s disclosure of his 9.2% stake on April 4, 2022, Twitter’s share price rose by 27%.
In his defense, Musk said he had planned to disclose his Twitter stake in late 2022 but did so too quickly after realizing he had misinterpreted the SEC’s disclosure rule.
“This is not a fraud scheme,” Musk said. “All indications, including those in the allegations, point to an error.”
Musk also refuted investors’ claim that an unnamed Morgan Stanley banker helped develop a trading strategy to accumulate Twitter stock without alerting the broader market.
Last September, U.S. District Judge Andrew Carter declined to dismiss an earlier version of the lawsuit, citing evidence that Musk understood the SEC’s information and had testified about it under oath. The case, titled Oklahoma Firefighters Pension and Retirement System v Musk et al, is pending in the U.S. District Court for the Southern District of New York.
