Elon Musk Is Being Sued By Twitter Shareholders - Find Out Why

Twitter shareholders are going after Elon Musk.

Just days after the 50-year-old Tesla and SpaceX founder had purchased more than 9% stake in the company, the shareholders claim that Elon failed to properly disclose his purchases within the appropriate timeframe.

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According to Variety, the suit claims that Elon was 10 days late in filing his legally mandated disclosure form after amassing more than 5% of Twitter shares.

The lawsuit, which had been filed by Marc Bain Rasella, explains that he reached the 5% disclosure threshold by March 24 but he didn’t file the proper paperwork until April 4. After the news hit, Twitter shares shot up 27%.

It goes on to say that shareholders, who sold stock in the May 24-April 1 period, were shortchanged because they were unaware of Elon‘s purchases.

“Defendant Musk, because of his position as a 5% owner in Twitter, had an obligation to file a Schedule 13 with the SEC. Defendant had the obligation, ability, and opportunity to prevent the issuance of the false statements and omissions alleged herein,” the suit states. “Because of his position as a 5% owner in Twitter, and access to material non-public information available to himself but not to the public, Defendant Musk knew that the adverse facts specified herein had not been disclosed to and were being concealed from the public and that the omissions being made were false and misleading.”

Following his purchase of Twitter shares, it was assumed that Elon would be joining the Twitter board. However, that’s not the case.