The paperwork, pursuant to Section 13d of the Exchange Act and SEC rule 13d-1 is required within 10 days of a shareholder gaining 5-percent ownership of a company. In this case, that company is Twitter. According to the complaint, Elon Musk not only didn’t file the paperwork within that timeframe. But also continued to gain shares, up to 9.1-percent before filing. Mr. Musk is said to have filed on April 4 but to have passed the stake threshold on March 24. That puts the filing a full day late, based on the SEC’s rules.
How did the delay by Elon Musk impact investors, according to the class action suit?
The lawsuit, filed on the twelfth with the Southern District Court of New York, alleges that the delay effectively cost fellow shareholders as much as $156 million. That is, according to the allegation, by barring fellow shareholders from “similarly” profiting. Namely, by causing shareholders to sell shares at “artificially deflated prices.” Furthermore, the suit claims that Mr. Musk made false and misleading statements as well as omissions that led to the disparage. Pointing to Mr. Musk’s failure to disclose his shareholdings to stakeholders of Twitter. More succinctly, the suit claims that Mr. Musk’s acquisition went unreported. And, coupled with comments allegedly made by the tech mogul the pricing for shares were artificially lowered. That, in turn, caused shareholders to sell off shares. As is standard in these types of cases. The courts and the SEC have not responded to or commented on the class-action suit against Elon Musk. Class action lawsuits typically take months or years before they’re resolved. Mr. Musk has also not responded to the allegations publicly, as of this writing.
