Elon Musk being sued for fraud over disclosure of Twitter shares

Apart from the shareholders of the company, the US securities and exchange commission is also suing Musk for improper disclosure.

Published on: Mar 29, 2025, 04:40:55 IST

By HT News Desk

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Soon after announcing that he had sold social media platform X to an AI company, a US judge on Friday rejected Elon Musk's bid to dismiss a lawsuit that accused him of defrauding Twitter shareholders about his investment in the company, reported Reuters.

Elon Musk is being sued for non disclosure of his Twitter shares on time (AP)

Also Read: Who owns xAI? Elon Musk says his social media platform X has been sold to AI company

Manhattan district judge Andrew Carter said that the shareholders of the platform formerly known as Twitter had provided adequate evidence that Musk had intended to commit fraud through an improper regulatory filing, misleading posts on the future of the platform and had employed a “strategy” to silently build his stake in the company.

Musk is now the head of the Department of Government Efficiency (DOGE) under US President Donald Trump, along with his other holdings, namely SpaceX and Tesla.

Also Read: Elon Musk stepping down as DOGE chief amid Tesla crisis? What we know

Apart from the shareholders of the company, the US securities and exchange commission is also suing Musk for improper disclosure.

The plaintiffs said that Elon Musk had missed a deadline in 2022 to reveal that he had bought 5% of Twitter's shares, and did the same later when he increased hi shares to 9.2%.

Also Read: Elon Musk's X back up after brief outage in the US

They stated that this endeavour helped Musk save more than $200 million and harmed them, as they sold shares at artificially low prices. Musk purchased the platform in October 2022.

Musk's 9.2% investment, according to the judge, could be misleading, as it gave the impression that he was making short term investments and not buying the company. Twitter shares had risen up to 27% on April 4, 2022 after Musk revealed his 9.2% stake.

Carter said that shareholders of the platform were well within their rights to sue Musk regarding two tweets on March 26, 2022, where he said he was "giving serious thought" to building a Twitter rival, and responded to a suggestion he buy Twitter and change its bird logo to a doge by saying “Ha ha that would [be] sickkk.”

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HT News Desk
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