Twitter Class Action Claims Elon Musk Waited Too Long To Disclose His Stock Purchase to SEC

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Elon Musk Twitter Stock Class Action Lawsuit Overview: 

• Who: Marc Bain Rasella has filed a class action lawsuit against Elon Musk. 
• Why: Rasella, a Twitter investor, claims Elon Musk waited too long to officially disclose his purchase of Twitter stock to the SEC, arguing the Tesla CEO needed to officially disclose within 10 days of his stake in the company becoming 5%. 
• Where: The class action lawsuit was filed in New York federal court. 

Elon Musk is being accused of harming Twitter investors by waiting too long to officially disclose his investment in the company to the US.. Securities and Exchange Commission (SEC). 

Twitter investor Marc Bain Rasella, in a class action lawsuit filed against Musk this week, claims the product architect and CEO of Tesla waited 11 days too late to officially disclose his purchase of Twitter’s stock to the SEC. 

Rasella argues Musk was required by law to officially disclose his investment with the SEC by Mar. 24 — 10 days after his stake in Twitter rose to at least 5% — however, the investor says the SpaceX founder didn’t do so until Apr. 4.

During that time, Rasella argues Musk was able to save around $143 million by filing his form with the SEC past the deadline as he continued to purchase shares at the expense of other shareholders. 

Rasella claims Twitter investors who sold the stock between the time Musk was supposed to disclose and when he actually did were harmed since they were unable to cash in on the share price increase that occurred when the market found out and reacted to his purchase. 

Twitter Class Action Claims Disclosure Delay Led To ‘Artificially Deflated’ Price

Because of the delay, Rasella claims he and others like him ended up selling Twitter stock at an “artificially deflated” price. 

Rasella also argues Musk was guilty of making “materially false and misleading statements and omissions” due to his alleged failure to disclose that he had acquired a 5% ownership stake in Twitter. 

Musk purchased a total of 9.2% of Twitter stock, which makes him the largest outside shareholder, according to NBC News, which reports the company’s stock price jumped 27% after news of his acquisition went public. 

Rasella claims Musk is in violation of the Securities Exchange Act of 1934. He is demanding a jury trial and requesting an award of compensatory and punitive damages for himself and all class members. 

Musk was defiant in the face of separate claims litigated last year where he was accused by Tesla pension fund stockholders of pushing through the company’s acquisition of a “troubled” SolarCity Corp. for $2.6 billion. 

Are you a Twitter investor who was financially harmed by Musk’s alleged failure to disclose his stock purchase on time with the SEC? Let us know in the comments! 

The plaintiff is represented by Jeffrey C. Block, Jacob A. Walker and Nathaniel Silver of Block & Leviton LLP. 

The Elon Musk Twitter Stock Class Action Lawsuit is Rasella v. Musk, Case No. 1:22-cv-03026, in the U.S. District Court for the Southern District of New York.

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