Elon Musk Fails to Stop Investor Lawsuit Over Twitter Acquisition
Elon Musk’s attempt to dismiss a lawsuit brought by investors who accused him of manipulating Twitter Inc.’s stock price preceding his acquisition of the company in 2022 was unsuccessful. The Manhattan federal judge ruled in favor of investors, allowing them to pursue allegations of securities fraud against Musk. The claim asserts that Musk engaged in manipulative trading practices by concealing his stock acquisition in Twitter, tweeting misleading information about Twitter’s future, and initiating a silent trading strategy to increase his holdings in the social media platform.
Musk’s and the investors’ attorneys did not provide immediate responses to requests for comments on the ruling. The judge’s decision was influenced by several tweets from Musk in which he openly deliberated the Twitter acquisition and conducted a poll on Twitter, questioning the prevalence of fake or spam accounts on the platform. While some of Musk’s tweets were deemed to support the fraud claims, others were considered not relevant to the case.
Despite Musk’s legal team’s efforts to dismiss the lawsuit, claiming it lacked legal justification and was a mere publicity stunt to capitalize on Musk’s high-profile status and the acquisition of Twitter, the case proceeded. A previous lawsuit filed by the SEC against Musk before Donald Trump took office faced similar allegations, with Musk’s lawyer defending him against what he referred to as minor infractions that ordinarily incur minimal penalties.
Musk is scheduled to participate in a deposition next week for another investor lawsuit related to the acquisition of Twitter. The case is titled Rasella v. Musk, and it is pending at the U.S. District Court for the Southern District of New York (Manhattan). The photo accompanying the article depicts Musk, capturing a moment during a crucial legal battle for the billionaire entrepreneur.
The lawsuit against Musk underscores the complex legal challenges faced by high-profile figures in the business world and the scrutiny they encounter in their financial dealings. This case is just one in a series of legal battles involving Musk and his actions surrounding significant business transactions, shedding light on the intricate interplay between corporate governance, securities regulations, and individual accountability in the contemporary business landscape.