Twitter Shareholders Second Group Sued Elon Musk

On Wednesday, Twitter shareholders filed yet another class-action lawsuit against Elon Musk, alleging that he violated corporate laws, destabilizing Twitter’s stock price.

Elon Sued by Other Shareholders of Twitter

The current case is identical to a class-action lawsuit filed by a Twitter stockholder in April in New York. In both cases, the Tesla and SpaceX CEO is accused of failing to disclose his purchase of a 5% investment in Twitter stock in mid-March. While Musk is accused of breaking US Securities and Exchange Commission requirements by failing to notify within 10 days, the complaint filed Wednesday contends that the same failure breaches California corporation law. According to the lawsuit, by delaying, Musk could buy the stock at a lesser price and save $156 million.

Musk is also accused of numerous legal infractions in the second class-action lawsuit, including failing to disclose his plan to join the Twitter board of directors and buying stock based on insider knowledge obtained through interactions with other board members and officials. Former Twitter CEO Jack Dorsey, who resigned from the board on Wednesday, is one of them.

The claim primarily accuses Musk of acting illegally to protect himself from financial danger as Twitter’s stock price fell following his attempts to buy the company.

Serious Allegations Against Him

“Musk then continued to make statements, send tweets, and involve in conduct designed to raise doubt about the deal. And drive Twitter’s stock down significantly to produce leverage that Musk wished to use to back out of the acquisition. Or re-negotiate the buyout cost by as much as 25%, which, if achieved, would lead to an $11 billion reduction in the Buyout consideration,” according to the lawsuit. “Musk’s conduct was and remained illegal, in violation of the California Corporations Code, and in breach of the contractual conditions he agreed to in the arrangement, as outlined above.”

Twitter has remained silent on the subject. Elon Musk’s spokesperson did not respond to a request for comment at the time of publishing.

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