Elon Musk is being sued by former Twitter shareholders, claiming he hid his 9.2 per cent stake in the social media company.
The shareholders say they missed out on the spike in stock price because Musk waited too long to reveal his position.
The matter was filed in Manhattan federal court.. with the shareholders saying Musk made “materially false and misleading statements and omissions” by withholding that he had invested in Twitter.
Under federal law he was required to disclose the information by March 24.
Twitter shares grew by 27 per cent at the start of April, reaching nearly 50 dollars following Musk’s stake reveal.
Previous shareholders say this allowed Musk to buy more Twitter shares at lower prices and pushing them into selling theirs at lower prices as well.
Through the lawsuit, former shareholders are seeking compensatory and punitive damages.
