Tesla CEO Elon Musk is facing a lawsuit from a Twitter shareholder claiming his delay to disclose the purchase of the stake, manipulated the market.
Musk is being sued by Twitter shareholder Marc Bain Rasella, who has alleged the CEO didn’t disclose the ownership of over 5 percent stake in the social media company immediately, which kept the share price low artificially, according to Bloomberg.
Rasella is suing Musk for securities fraud in a Manhattan federal court, saying that Musk was obligated to disclose Twitter holdings to the Securities and Exchange Commission (SEC) on March 24.
Instead, Rasella says Musk’s delay in disclosing his holdings let him purchase more shares at a lower price.
Elon Musk Has ‘Decided Not to Join’ Board of Twitter, Says CEO https://t.co/CSIavTt9Gh
— TeslaNorth.com (@RealTeslaNorth) April 11, 2022
As a result, Rasella says Musk cheated the sellers of Twitter sales out of more profits.
After Musk did disclose his Twitter stake to the SEC, the social media company’s shares increased 27 percent, jumping from $39.31, where it was on April 1, to $49.97 by April 4.
Thus far, Twitter has declined to comment on the lawsuit.
Last month, a Tesla shareholder opened a lawsuit against Musk for his $2.5 billion pay package in 2018.
