Home Technology Elon Musk faces lawsuit for late reporting of the stock purchase on Twitter

Elon Musk faces lawsuit for late reporting of the stock purchase on Twitter

Elon Musk faces lawsuit for late reporting of the stock purchase on Twitter

Elon Musk faces lawsuit for late reporting of the stock purchase on Twitter

The CEO of Tesla and SpaceX, Twitter’s major shareholder, is now facing a lawsuit. Photo by Reuters

Elon Musk seems to be in trouble for his recent Twitter stock purchase. A lawsuit filed by another Twitter investor accuses the billionaire businessman of costing shareholders money, while Musk itself saved approximately $ 143 million.

Filed by Marc Bain Rasella in New York federal court on Tuesday, April 12, the lawsuit highlights Musk’s apparent failure to disclose his March 14 stock purchase in Securities and Exchange Commission (SEC) within 10 days set by law when a share exceeds 5%.

In particular, the lawsuit alleges that Musk made “material false and misleading statements and omissions by not telling investors that he acquired a 5% stake in Twitter when necessary.”

He said this means that anyone selling the shares between March 24 (the date Musk must declare the purchase) and April 4 (the details of the purchase date made public) will lose revenue as the value of parts of Twitter rose 27% when it learned of the purchase.

The suit also says the Tesla and SpaceX boss earned $ 143 million in the region in the same 11-day period when he bought more Twitter shares at a low price, a move that made him the company’s largest sole shareholder. with 9.2%.

Rasella’s suit sought class-action status on behalf of Twitter investors who sold shares over the crucial 11-day period and as a result forfeited the profits they would have benefited from if Musk had disclosed . your investment within the required time. The action calls for a jury trial for damages and penalties in unspecified amounts.

Musk, a former Twitter critic who also has more than 80 million followers on the platform, caused a stir with his surprise investment in the San Francisco -based company when it came to light last week.

Twitter responded by offering a seat on its board, but abruptly declined the offer on Friday, the same day the appointment must be made.

Twitter just announced Musk’s change of heart on Monday after a weekend in which Musk released deleted tweets suggesting a variety of Twitter -related ideas, from more formal issues to criticism and paradox.

The SEC has not yet made any public comment on whether it plans to take action against Musk for his apparent misconduct. Disclosure of your purchase of parts within the stipulated period.

Musk, in Texas, on Friday last week.  Photo by AFP

Musk, in Texas, on Friday last week. Photo by AFP

Said “no” to the board

Musk also resigned from Twitter’s board of directors, of which he is the major shareholder, as announced Sunday night by the social network’s CEO.

Elon decided not to join our board of directors“Parag Agrawal tweeted.

“Elon’s arrival on the board of directors is supposed to be formal on April 9, but Elon announced this morning that he will not be joining the board,” he explained in a message to Twitter staff, which was shared on the platform. “I think it’s the best”.

“We are grateful and continue to appreciate the participation of our shareholders, whether they are on our board or not. Elon is our largest shareholder and we remain open to his participation.Agrawal added.

Musk, the richest man in the world, announced in early April that he had acquired a 9.2% stake in Twitter, making him the largest shareholder.

Agrawal indicated on Tuesday that Musk would join the board, describing him as “an ardent believer and a extreme critic of servicethat’s exactly what we need. “

And Musk himself tweeted that he was “expected to work with Parag and the Twitter board.” to make significant improvements to Twitter in the coming months!However, in his announcement on Sunday, Agrawal shared a note he sent to Twitter, saying that Musk’s appointment to the board would be subject to a background check and that he would have to act in the company’s interest once named.

Source: Clarin


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