Elon Musk was sued on Tuesday by former Twitter shareholders who claim they missed out on the recent run-up in its stock price because he waited too long to disclose a 9.2 per cent stake in the social media company.
In a proposed class action filed in Manhattan federal court, the shareholders said Musk, the chief executive of electric car company Tesla, made "materially false and misleading statements and omissions" by failing to reveal he had invested in Twitter by March 24 as required under federal law.
Former shareholders led by Marc Rasella said the delayed disclosure let Musk buy more Twitter shares at lower prices, while defrauding them into selling at "artificially deflated" prices.A lawyer for Musk had no immediate comment. Tesla is not a defendant. Twitter announced on April 5 that Musk would join its board of directors, but this week said he had decided not to.
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