Elon Musk seeks dismissal of lawsuit over delayed Twitter stake disclosure
The case, led by an Oklahoma public pension fund, is being heard in a Manhattan federal court, with US District Judge Andrew Carter previously refusing to dismiss it.
Elon Musk is seeking to dismiss a lawsuit filed by former Twitter shareholders, alleging that he delayed revealing his large ownership stake in the company in early 2022. The shareholders claim Musk and his wealth manager, Jared Birchall, knew they were required by SEC rules to disclose when Musk’s stake exceeded 5% by 24 March 2022 but waited another 11 days. The delay, they argue, allowed Musk to buy more shares at lower prices, saving over $200 million.
In a filing in Manhattan federal court, Musk argued that the delay was a mistake rather than an attempt to defraud shareholders. He contended it was implausible to believe he intended to deceive investors who were unaware of his 9.2% stake and who missed out on significant gains by selling their shares prematurely. Musk claimed he initially planned to disclose his stake at the end of 2022 but did so earlier after realising he had misunderstood the SEC disclosure rule.
An Oklahoma public pension fund is leading the lawsuit. Despite Musk’s defence, a US District Judge had previously refused to dismiss the case, citing evidence that Musk understood the SEC’s disclosure requirements. Musk eventually bought Twitter, now known as X, for $44 billion in October 2022, and the SEC has also investigated his stock purchases.
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