Elon Musk has filed a motion to dismiss a lawsuit brought by former Twitter shareholders, who allege he failed to disclose his significant ownership stake in the company in a timely manner.
The shareholders claim Musk’s delay in revealing his 9.2% stake in Twitter resulted in them missing out on substantial gains and allowed him to purchase additional shares at a lower price.
In his filing, Musk argues that it is implausible to suggest he intentionally sought to defraud shareholders, stating that his failure to disclose his stake earlier was a mistake. He claims he had intended to reveal his ownership stake at the end of 2022 but promptly did so after realizing his misunderstanding of the SEC disclosure rule.
Musk denies allegations that he worked with a Morgan Stanley banker to devise a trading strategy to amass Twitter shares without alerting the market. The lawsuit, led by an Oklahoma public pension fund, seeks damages for the alleged fraud. The case is ongoing in the U.S. District Court, Southern District of New York.
Musk’s legal team argues that the lawsuit lacks evidence and is based on unfounded claims. The SEC has also investigated Musk’s Twitter stock purchases, and he eventually acquired the company for $44 billion in October 2022.
