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    Saturday, July 6, 2024

    Late Disclosure of Information on Twitter Stake was a Mistake, Musk Clarifies

    Musk indicates that the delayed disclosure of information regarding Twitter may have been an error in judgment and expresses his desire to resolve the ongoing legal proceedings.

    Mr. Elon Musk seeks to dismiss a legal action brought forth by previous Twitter shareholders. The shareholders allege that Mr. Musk delayed the disclosure of his substantial ownership stake in the social media platform in early 2022. Mr. Musk asserts that “all evidence” suggests his delay was an error.

    In a late Wednesday night submission to the Manhattan federal court, Mr. Musk asserted that it is implausible to assume that he intended to deceive shareholders who were unaware of his acquisition of a 9.2% stake in Twitter, resulting in their missing out on substantial gains due to the sale of their own stock.

    Shareholders involved in the proposed class action lawsuit alleged that Musk and his wealth manager, Jared Birchall, were aware of a U.S. Securities and Exchange Commission regulation requiring Mr. Musk to disclose his acquisition of 5% of Twitter by March 24, 2022. However, they waited an additional 11 days before making the disclosure.

    The investors indicated that this allowed Musk to acquire additional shares at a favorable price, resulting in savings exceeding $200 million. Twitter, now known as X, experienced a significant increase of 27% on April 4, 2022, following Musk’s disclosure of his 9.2% stake.

    Musk is recognized as the wealthiest individual globally by Forbes magazine. Additionally, he holds leadership positions in various other organizations, notably Tesla, a prominent manufacturer of electric vehicles.

    In his official submission, Musk indicated his original intention to disclose his Twitter shareholding at the conclusion of 2022. However, upon recognizing a misunderstanding of the SEC disclosure regulation, he promptly revealed the information.

    "Musk clarified that this is not a scheme to defraud. All indications, including those in the pleadings, suggest that this was an error."

    Musk refuted the investors’ assertion that an unnamed Morgan Stanley banker assisted in the development of a trading strategy to accumulate Twitter shares without informing the broader market.

    The legal representatives of the investors, spearheaded by an Oklahoma public pension fund, have yet to furnish a response to the inquiries for comments made on Friday.

    Musk completed the acquisition of Twitter, a company based in San Francisco, for a sum of $44 billion in October of 2022. Additionally, the SEC has conducted an investigation into his purchases of Twitter stock.

    In September of last year, U.S. District Judge Andrew Carter declined to dismiss an earlier iteration of the lawsuit. Evidence suggests that Mr. Musk comprehended the SEC disclosure and gave sworn testimony regarding it.

    The legal case in question is Oklahoma Firefighters Pension and Retirement System versus Musk et al, filed in the United States District Court for the Southern District of New York, under case number 22-03026.

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