Elon Musk recently addressed concerns from investors regarding his tweets about potentially starting his own social network and his purchase of Twitter. A lawsuit was filed against Musk, alleging that he intentionally misled Twitter investors by not disclosing his growing stake in the company, which allegedly led to a $200 million reduction in the purchase price. However, Musk clarified that he misunderstood the Securities Exchange Act and believed he was required to disclose his stake at the end of the year, rather than within 10 days after amassing a 5 percent stake. He argued that his delayed filing was a mistake, not fraud, and that he promptly stopped trading and filed the disclosure once he realized his error.
Musk emphasized that the allegations of intentional securities fraud to save $200 million are illogical given his $44 billion purchase of Twitter. He stated that he never intended to avoid reporting requirements and that he was guilty of neglect, not deception. Musk has requested for the lawsuit to be dismissed with prejudice, claiming that the firefighters’ claims do not constitute an actionable claim under the Securities Exchange Act.
The firefighters pension fund, which filed the lawsuit, has until August 12 to defend its claims and keep the suit alive. They are seeking damages for all Twitter shareholders who were allegedly affected by Musk’s actions. Musk’s lawyers and the firefighters pension fund were not immediately available for comment on the matter.
