social network
Twitter shareholder launches class action lawsuit against Elon Musk
Elon Musk announced on April 4 that he held a good nine percent stake in Twitter. Photo: Patrick Pleul/dpa-Zentralbild POOL/dpa
© dpa-infocom GmbH
Strict regulations apply to holdings in US companies of more than five percent. A shareholder has now accused Musk of failing to meet a reporting deadline after becoming an investor on Twitter.
Tesla boss Elon Musk is threatened with legal trouble after joining Twitter as a major investor.
A shareholder of the company launched a potential class action lawsuit against the multi-billionaire in a court in New York over alleged securities fraud. This was announced by the competent law firm.
The plaintiff accused Musk of not making his Twitter investment public within the statutory reporting period. As a result, a stock market reaction was delayed and the share price was kept artificially low while he continued to expand his stake. Musk did not initially comment on the lawsuit.
Strict regulations actually apply when holdings in US companies exceed the five percent threshold. On April 4, Musk announced in a mandatory notification to the SEC that he held a good nine percent stake in Twitter. This news caused the share price to rise sharply.
But according to the lawsuit, Musk’s stake was already more than five percent in mid-March – without being announced within ten days. As a result, Musk was able to continue buying cheap Twitter shares until the April 4 announcement. Investors who sold during this period were disadvantaged.