"Violation of Securities Law, Delayed Disclosure Manipulated Market" Twitter Shareholders Sue Musk

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Elon Musk, CEO of Tesla, has been sued by Twitter shareholders. The reason is that he disclosed the acquisition of Twitter shares late after initially acquiring them.

According to IT media The Verge on the 26th (local time), Twitter investors filed a lawsuit with the U.S. District Court in California the day before regarding this matter.

Twitter shareholders claimed in the lawsuit that CEO Musk violated relevant laws. Under U.S. securities law, if an investor acquires more than 5% of a company's shares, they must disclose this within 10 days. According to this, CEO Musk should have disclosed the acquisition by March 24, but the first disclosure of holding 9.2% of Twitter shares was made on the 4th of last month.

Additionally, the shareholders argued, "CEO Musk delayed the disclosure of Twitter shares and engaged in market manipulation," and "artificially bought Twitter shares at a low price, gaining $156 million."

Twitter declined to comment on this matter.

Meanwhile, CEO Musk submitted a new funding plan to the U.S. Securities and Exchange Commission (SEC) the day before, stating that he would raise funds for the Twitter acquisition without a Tesla stock-backed loan.

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