Elon Musk Seeks Dismissal of Lawsuit Over Late Twitter Disclosure

Elon Musk, the billionaire CEO of SpaceX and Tesla, is facing a lawsuit from former Twitter shareholders who claim he waited too long to reveal his large ownership stake in the social media company. Musk, however, is seeking to dismiss the lawsuit, stating that his delay was a mistake and not an attempt to defraud shareholders.

In a filing in Manhattan federal court, Musk argued that it was implausible to believe he intentionally withheld information about his 9.2% stake in Twitter to deceive shareholders. He claimed that he had intended to disclose his stake at the end of 2022 but misunderstood the SEC disclosure rule and promptly revealed it once he realized his mistake.

The investors in the proposed class action allege that Musk and his wealth manager knew about the SEC rule requiring disclosure of a 5% stake in Twitter by March 24, 2022, but waited an additional 11 days to disclose the information. This delay allegedly allowed Musk to buy more shares at lower prices, saving him over $200 million. When Musk finally revealed his stake, Twitter’s stock price surged by 27%.

Musk, who is the world’s richest person according to Forbes magazine, denied the investors’ claim that a Morgan Stanley banker helped him devise a trading strategy to accumulate Twitter shares without alerting the broader market. The case is ongoing, with lawyers for the investors, led by an Oklahoma public pension fund, yet to respond to Musk’s filing.

Despite the legal challenges, Musk went on to acquire Twitter for $44 billion in October 2022. The SEC has also investigated his Twitter stock purchases. U.S. District Judge Andrew Carter previously refused to dismiss an earlier version of the lawsuit, citing evidence that Musk understood the SEC disclosure rule and testified about it under oath.

The case, titled Oklahoma Firefighters Pension and Retirement System v Musk et al, is being heard in the U.S. District Court, Southern District of New York. Stay updated on this story and more world news on Hindustan Times.