A few days ago Elon Musk owner of companies such as Tesla or SpaceX became one of the main shareholders of Twitter and according to new reports, now the entrepreneur is sued by a shareholder of the social network because he did not declare the value of his participation in the company in the time agreed by the Securities and Exchange Commission.
According to the media outlet Protocol, the lawsuit was filed by shareholder Marc Bain Rasella, who accuses Musk of carrying out securities fraud by not revealing what his participation in the purchase of Twitter shares would be what could benefit him for the purchase of shares at a lower price.
This, because after the CEO of Tesla reported his actions on Twitter, the share price increased by up to 27 percent.
The declaration of Elon Musk’s participation in the social network should have been made between March 24 and April 1, however, he did so until April 4.
The lawsuit seeking to be class action would represent shareholders of the social platform who sold shares before Elon declared their stake, the 11-day delay in declaring their stake may have brought Musk profits of more than $156 million, based on financial estimates.
«Investors who sold Twitter shares between March 24, 2022, when Musk was asked to disclose his ownership on Twitter, and before the april 4 actual disclosure, missed out on the resulting stock price increase, as the market reacted to Musk’s purchases and were hurt by it,» the lawsuit states.
In recent days, Elon Musk became the largest shareholder of Twitter after acquiring 9.2 percent of its shares, although he could join the board of directors of Twitter with that percentage, he declined this measure, which would have as a background the objective of buying more shares, according to specialists in the subject, if Musk joined Twitter’s board of directors, he could not own more than 14.9 percent in the future of the social network.