Judge Rules Musk Must Face Lawsuit Over Delayed Twitter Stake Disclosure
A U.S. federal judge has ruled that Elon Musk must face a lawsuit alleging he defrauded former Twitter shareholders by failing to disclose his sizable stake in the company within the timeframe required by law.
Shareholders claim Musk violated U.S. Securities and Exchange Commission (SEC) rules by waiting 11 days past the deadline to reveal his 9.2% stake in Twitter, which they say enabled him to save over $200 million by buying shares at lower prices.
The lawsuit also points to Musk’s tweets from March 2022—suggesting he was considering launching a rival platform and joking about buying Twitter—as part of a broader strategy to mislead the market.
U.S. District Judge Andrew Carter said the shareholders provided sufficient grounds to proceed, although he dismissed some other claims. The SEC is separately pursuing Musk over the same delayed disclosure.
Twitter’s share price surged 27% after Musk’s stake was revealed.
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