Elon Musk Sued For Failing To Properly Disclose Twitter Shares
Elon Musk is facing a federal class-action lawsuit from Twitter shareholders that alleges the owners missed out on potential gains because his purchase of shares was not adequately disclosed. Musk, the tech mogul who serves as the CEO of both Tesla and SpaceX, has been consumed by a flurry of media attention following his surprise buy of Twitter shares. Although the company has maintained that the billionaire will not have the power to impact Twitter's day-to-day operations, Musk has been consistent in his displeasure with its free speech and moderation policies. After briefly considering a social media platform launch of his own, Musk bought a significant stake in Twitter, which is now under scrutiny.
On Monday, April 4, 2022, Musk revealed through a filing with the U.S. Securities and Exchange Commission (SEC) that he had purchased 73,486,938 shares of Twitter, which is equivalent to a 9.2 percent stake in the company. The ownership is considered a passive stake, but it is possible that Musk's holdings could become an active stake in the future. His sudden purchase of shares — which now puts Musk as the largest Twitter shareholder — raised questions about his intentions for his stake and thus the company. Twitter CEO Parag Agrawal initially announced that Musk would be granted a seat on Twitter's Board of Directors; however, Musk turned down the offer to join the board on Saturday, April 9.
Related: Elon Musk's Next Target Is The Twitter Verified Check
The reveal of Musk's holdings on April 4 sparked a class-action lawsuit about the legality of his disclosure of the Twitter purchase. According to the filing, he started to purchase shares of Twitter as early as Jan. 2022. Musk had amassed a five-percent stake in the
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