SAN FRANCISCO (AP) – Elon Musk’s huge investment in Twitter took a new turn on Tuesday with the multimillionaire billionaire illegally delaying in revealing his stake in the social media company so he could buy more with at lower prices.
The complaint in the federal court of New York accuses Musk of violating a regulatory deadline to reveal that he had accumulated a share of at least 5%. According to the complaint, Musk did not disclose his position on Twitter until he almost doubled his share to more than 9%. The strategy, the lawsuit claims, hurt less wealthy investors who sold shares in the San Francisco company almost two weeks before Musk admitted to owning a significant stake.
Musk’s regulatory deposits show that it bought just over 620,000 shares at $ 36.83 each on Jan. 31 and then went on to accumulate more shares almost every trading day until April 1st. held 73.1 million shares on Twitter as of the most recent count on Monday. This represents a 9.1% share on Twitter.
The lawsuit alleges that by March 14, Musk’s Twitter account had reached the 5% threshold that required him to publicly disclose his holdings under U.S. Securities Act by March 24. Musk did not make the required revelation until April 4.
The revelation sent Twitter shares up 27% from April 1 to close at $ 50 by the end of trading on April 4, depriving investors who sold shares before the inappropriate delay of Musk’s revelation of the opportunity to make significant gains. profits, according to the lawsuit filed on its behalf. an investor named Marc Bain Rasella. Musk, meanwhile, was able to continue buying shares that traded at prices ranging from $ 37.69 to $ 40.96.
The lawsuit seeks to be certified as a lawsuit representing Twitter shareholders who sold shares between March 24 and April 4, a process that could take a year or more.
Musk spent about $ 2.6 billion on Twitter shares – a fraction of his estimated fortune of $ 265 billion, the largest private fortune in the world. In a regulatory hearing Monday, Musk revealed that he could increase his stake after withdrawing from an agreement reached last week to join Twitter’s board.
Jacob Walker, one of the lawyers who filed the lawsuit against Musk, told the Associated Press that he had not contacted the Securities and Exchange Commission about Musk’s alleged breaches of his Twitter account. “I guess the SEC knows very well what it did,” Walker said.
An SEC spokesman declined to comment.
The SEC and Musk have been at loggerheads since 2018, when Musk and Tesla agreed to pay a $ 40 million fine to settle allegations that he used his Twitter account to mislead investors about a possible takeover of the electric company. car that was never implemented. As part of the deal, Musk had to obtain legal approval for his tweets about information that could affect Tesla’s share price – a provision that regulators claim has been breached from time to time and is now being misused. .
Musk did not immediately respond to a request for comment, which was posted on Twitter, where he often shares his views and thoughts. Alex Spiro, a New York lawyer representing Musk in his ongoing dispute with the SEC, also did not immediately respond to a question from the Associated Press.
