Elon Musk faces more trouble as US judge allows former Twitter investors to …
A US judge permitted a class action lawsuit against Elon Musk by former Twitter investors alleging he defrauded them during his 2022 acquisition.Summary
A federal judge has allowed a class action lawsuit brought by former Twitter (now X) investors against Elon Musk to proceed. Judge Andrew Carter ruled that Musk did not adequately rebut the presumption that his alleged misrepresentations impacted Twitter’s share price and that investors relied on his silence. The lawsuit centers on Musk’s delayed disclosure of his initial investment in Twitter in 2022, with investors claiming he waited beyond the SEC-mandated deadline to reveal his 5% stake, ultimately disclosing a 9.2% stake eleven days later.
Investors, led by the Oklahoma Firefighters Pension and Retirement System, allege that Musk saved over $200 million and caused them to sell shares at lower prices during that period. They also point to Musk’s tweets on March 26, 2022, where he discussed potentially creating a Twitter rival and joked about buying the platform, as factors influencing their investment decisions.
This case is separate from another recent lawsuit in San Francisco where a jury found Musk liable for attempting to lower the takeover price by questioning the number of bot accounts on Twitter. Musk argued that investors could not prove they relied on his alleged fraud, but the judge disagreed, allowing the class action to move forward.
(Source：Times of India)