Elon Musk faces more trouble as US judge allows former Twitter investors to …
A federal judge has allowed two former Twitter (now X) investors to purse their case against Elon Musk as a class action lawsuit , adding to the legal challenges for the company owner Elon Musk. According to a report by news agency Reuters, U.S. District Judge Andrew Carter in Manhattan said that Musk did not overcome the presumption that his alleged misrepresentations affected Twitter's share price, and that the investors relied on his silence. The case pertains to Elon Musk’s purchase of Twitter in 2022 and alleges him of defrauding the investors by waiting too long to disclose his initial investment in the social media company.
Notably, the case is separate from a lawsuit in San Francisco federal court, where a jury last month found Musk liable for trying to drive the takeover price down by questioning whether Twitter was overrun by fake and spam accounts, or bots.
As per the Reuters report, former Twitter investors led by the Oklahoma Firefighters Pension and Retirement System claim that Musk ignored a March 24, 2022 deadline set by U.S. Securities and Exchange Commission (SEC) rules to reveal he owned 5% of Twitter shares, and waited 11 more days before disclosing a 9.2% stake. The investor said that the world's richest individual saved more than $200 million, and cheated them because they sold Twitter shares at depressed prices during the 11-day period.
Investors further allege that they relied on two March 26, 2022, tweets, where Musk said he was "giving serious thought” to creating a Twitter rival, and said "Haha that would be sickkk” after someone suggested he buy Twitter and change its bird logo to a doge image.
In an opposing class certification, Elon Musk said that investors could not prove they relied on his alleged fraud.
Notably, the case is separate from a lawsuit in San Francisco federal court, where a jury last month found Musk liable for trying to drive the takeover price down by questioning whether Twitter was overrun by fake and spam accounts, or bots.
As per the Reuters report, former Twitter investors led by the Oklahoma Firefighters Pension and Retirement System claim that Musk ignored a March 24, 2022 deadline set by U.S. Securities and Exchange Commission (SEC) rules to reveal he owned 5% of Twitter shares, and waited 11 more days before disclosing a 9.2% stake. The investor said that the world's richest individual saved more than $200 million, and cheated them because they sold Twitter shares at depressed prices during the 11-day period.
Investors further allege that they relied on two March 26, 2022, tweets, where Musk said he was "giving serious thought” to creating a Twitter rival, and said "Haha that would be sickkk” after someone suggested he buy Twitter and change its bird logo to a doge image.
In an opposing class certification, Elon Musk said that investors could not prove they relied on his alleged fraud.
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