In a Monday night filing, Elon Musk said investors in the proposed class action had no independent right to obtain damages under the SEC disclosure rule
Elon Musk asked a U.S. judge to throw out a lawsuit claiming that his delayed disclosure of a large stake in Twitter Inc defrauded shareholders who sold Twitter stock at artificially low prices because they were kept in the dark., who bought Twitter for $44-billion in October, of waiting 11 days past a U.S. Securities and Exchange Commission deadline the previous March to disclose he had bought 5 per cent of its stock.
But in a Monday night filing, Musk said investors in the proposed class action had no independent right to obtain damages under the SEC disclosure rule, and could not show that all class members actually relied on his silence before trading. Despite a “laundry list” of accusations suggesting an intent to defraud, “the most compelling inference is that any failure to disclose was inadvertent,” the world’s second-richest person said.
Under the SEC rule, investors must disclose within 10 days when they have acquired 5 per cent of a company, which for Musk’s Twitter investment would have been last March 24.
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