Musk has suffered a new setback in his lawsuit with Twitter investors. He's facing a class action lawsuit
In March, Musk had already lost one lawsuit related to his purchase of the social network
A district judge in New York has allowed Twitter shareholders' claims to be consolidated into one class action lawsuit / Photo: Shutterstock.com/FotoField
A district judge in New York has allowed Twitter investors to combine their claims against billionaire Elon Musk into a single class action lawsuit related to the businessman's purchase of the social network, Bloomberg reported.
Details
The plaintiffs claim to have been harmed by Musk's purchase of more than 13 million Twitter shares in 11 days beginning March 25, 2022, Bloomberg reported. The plaintiffs allege Musk ignored a filing deadline with the U.S. Securities and Exchange Commission (SEC), whose rules required him to disclose a 5% stake, and waited 11 extra days before disclosing a 9.2% stake, Reuters wrote. Musk saved more than $200 million, and investors, on the contrary, sold Twitter shares at a reduced price during this 11-day period, the agency reports the plaintiffs' position.
Judge Andrew Carter, in his ruling, noted the plaintiffs' arguments that Musk was untimely in his SEC filings, as well as [Musk's] "misleading tweets about the future of Twitter" and an alleged "coordinated trading strategy" to stealthily build up share, Bloomberg noted.
The judge's decision to consolidate the claims into a class action strengthens investors' position and increases the likelihood of a settlement or going to trial, Bloomberg said. Musk may suffergreaterlosses as a result than if investors had to sue him individually, Reuters believes.
A spokesman for Musk's lawyers did not respond to requests from Bloomberg and Reuters. Leading the plaintiffs is the Oklahoma Firefighters Pension and Retirement System, a fund that manages firefighters' pension funds, Reuters writes.
Context
Musk bought Twitter for $44 billion in October 2022 and then renamed it X.
On March 20, Musk lost a separate case in a San Francisco court. There, the jury found that Musk misled Twitter investors in 2022 with tweets about fake Twitter accounts, causing the company's stock to fall 10% in one day. The court ordered Musk to compensate the plaintiffs - Twitter investors. The amount will be determined later: it could reach hundreds of millions or even several billion dollars, Bloomberg wrote.
This article was AI-translated and verified by a human editor
