Elon Musk’s Twitter profile displayed on the computer screen and the Twitter logo displayed on the phone screen will be displayed in this illustrated photo taken on April 9, 2022 in Krakow, Poland.
Jakub Porzycki | nuphoto | Getty Images
The proposed class action lawsuit against the escape of Elon Musk and his family office could proceed in federal court, with a judge ruled Friday.
The case is Rasellav. Musk (Case number 1:22-CV-03026-ALC-GWG) Southern New York Region.
The lawsuit comes from a former Twitter shareholder who claims that Tesla and SpaceX CEOs lost money while accumulating shares in their social networks, but failed to disclose their purchases within the terms and conditions time frame.
The other plaintiffs in the Oklahoma Firefighter Pension and Retirement System and lawsuit complained that they had sold their then-published Twitter shares at “an artificially contracted prices,” but Musk masked his own interests and interest in the company.
Elon Musk and Jared Birchall did not immediately respond to requests for comment.
Musk’s lawyer argued that his disclosure was filed after an SEC mandated deadline, but this was merely a mistake, and that the large-scale person in the technology did not commit or intend to commit securities fraud.
In his opinion, Judge Andrew L. Carter, of the Southern District of New York, wrote that he agreed with the plaintiff that the court did not reveal that it had snapped its shares on Twitter.
In his 43-page opinion, the judge also pointed out that Musk posted a tweet on March 26, 2022, indicating that as of March 25, 2022, he had accumulated millions of shares on Twitter, but was considering buying another social network instead of Twitter.
He wrote that it was “rational” to read Musk’s tweets as a statement intended to misunderstand the public to think that buying Twitter was merely a fantasy. The judge also wrote that “it is likely that the masks issued material misleading phrases.”
Musk ultimately led the bid for Twitter’s leveraged buyout in 2022 on a deal worth around $44 billion. He cleaned up business, social platforms and later renamed it x.
As previously reported, the Securities and Exchange Commission filed a similar lawsuit against Musk on suspicion of failing to properly disclose his Twitter share purchases in 2022 before he took over the company.
On Friday, Musk said Xai, another of his venture, merged with social networks in all-stock deals, valued the artificial intelligence business at $80 billion and $33 billion.
