Elon Musk is seeking to dismiss a lawsuit filed by former Twitter shareholders who accuse him of delaying the disclosure of his significant ownership stake in the social media company in early 2022.
The shareholders claim this delay cost them substantial gains.
Musk argued that it is implausible to believe he intended to defraud shareholders unaware of his 9.2% Twitter stake, causing them to miss out on significant profits. Musk emphasized that all indications, including those in the pleadings, suggest the delay was a mistake.
The proposed class action lawsuit alleges that Musk and his wealth manager, Jared Birchall, were aware of a U.S. Securities and Exchange Commission (SEC) rule requiring disclosure by March 24, 2022, when Musk's stake reached 5%. However, they waited another 11 days to disclose this information. The delay allegedly allowed Musk to purchase additional shares at lower prices, saving more than $200 million. Twitter's stock, now trading under the name X, surged 27% on April 4, 2022, following Musk's revelation of his 9.2% stake.
Musk, the world's richest person according to Forbes magazine, and CEO of several companies, including Tesla, claimed in his filing that he initially intended to reveal his Twitter stake at the end of 2022. He asserted that he promptly disclosed it upon realizing his misunderstanding of the SEC's disclosure requirements.
"This is not a scheme to defraud," Musk stated. "All indications including those in the pleadings point to mistake."
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