Elon Musk failed to defend against investors’ lawsuits, claiming that he bought the company’s stock price in 2022 months ago to manipulate the stock price of Twitter Inc. by hiding the stock he obtained.
A federal judge in Manhattan said Friday that investors could use failure to promptly disclose securities fraud to the SEC, publishing “misleading tweets that mislead about Twitter’s future” and enforcing a “coordinated trading strategy to silently build on social media companies” status.
Musk and the investor’s lawyers did not immediately respond to requests for comment.
Musk publicly questioned whether to buy through Twitter some tweets posted the judge’s ruling. In March 2022, billionaires surveyed Twitter users to see if they think the platform has too many fake or spam accounts.
U.S. District Court Judge Andrew Carter Jr. ruled that some of the tweets supported fraud claims, while others did not.
Musk’s lawyers argued in a request for the case that it had no legal value and simply tried to “harness the wonders around him” and his $44 billion acquisition of social media platforms.
Musk faced similar charges in a lawsuit filed by the Securities and Exchange Commission before Donald Trump was sworn in. Musk’s attorney Alex Spiro said his client was “yes” at the time and accused the SEC of pursuing “ticky tick tak” violations that often resulted in nominal fines.
Musk will hold another investor lawsuit next week in his Twitter acquisition.
The case is Rasella v. Musk in US District Court, Southern District, 22-CV-03026.
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