Elon Musk Hit With Proposed Class Action Lawsuit Over Twitter Shares
Written by SOURCE on April 13, 2022
Elon Musk, who was confirmed this past weekend to not be joining the Twitter board after all, has been sued by a shareholder.
Per Reuters, a proposed class action filed in Manhattan federal court this week sees the shareholder arguing they and others were negatively impacted by Musk’s “delayed disclosure” of his investment. As previously reported, the SpaceX founder was revealed earlier this month to have taken a 9.2 percent stake in Twitter.
The suit is brought by Marc Rasella and specifically alleges that Musk made “materially false and misleading statements and omissions.” Additionally, as argued in the suit, Musk—as further detailed in this Associated Press report—is said to have “illegally delayed” the disclosure of his stake as part of an alleged effort to amass shares at a lower cost.
According to the AP, regulatory filings reveal the Tesla CEO purchased more than 620,000 shares in January and proceeded to consistently buy additional shares until April 1. The most recent tally showed that Musk was currently in possession of more than 73 million shares. The late disclosure is alleged to have saved Musk “around $143 million,” per NPR.
This past Sunday, Twitter CEO Parag Agrawal confirmed that Musk would not be joining the board, although he will remain the company’s largest shareholder.
“Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board,” Agrawal said at the time. “I believe this is for the best. We have and will always value input from our shareholders whether they are on our Board or not.”
