Elon Musk to Face Lawsuit Over Violation Of SEC Rules
Elon Musk is facing yet another lawsuit. The lawsuit states that Musk defrauded former Twitter shareholders. The U.S. District Judge, Andrew Carter, is the one assigned to the case. His recent ruling on the matter states that the shareholders of X, formerly called Twitter, can try to prove Elon’s ill intentions.
According to the order, the shareholders can try to prove that Musk had clear intentions of trying to deceive the shareholders. The shareholders will have to prove that Musk deceived them by not disclosing that he holds 5% of Twitter’s shares.
The shareholders have to prove this accusation. They have to show that Musk did not disclose information to the Securities Exchange Council within a period of 10 days. The delay, however, has ultimately led to Musk getting hold of an increased stake in the company. He currently holds a whopping 9.2% stake in Twitter.
This lawsuit is being led by the Oklahoma Firefighters pension fund. They are Musk of saving more than a sum of $200 million through this fraudulent measure. They also tried to have a discussion with X (formerly Twitter). In this, they talked with executives from the social media platform about Musk keeping his true intentions a secret. The shareholders are claiming that they have been a victim of fraud. They had initially sold Twitter shares at artificially low prices. However, they only did so because they were not aware of the actions of the Twitter owner.
Elon Musk’s legal team has argued that his concealment of facts was merely accidental. He did not mean to keep things confidential but just happened to be incredibly busy.
Musk had purchased Twitter (purchased for $44 billion) in October. The SEC rule allows all investors to disclose their acquisition of shares worth 5% or more of a company within 10 days.
The judge’s ruling allows the aggrieved to proceed with their case against X and Musk.