Elon Musk sued for allegedly delaying announcement of his Twitter purchase to buy shares on the cheap
Elon Musk (AFP)

On Tuesday, The Daily Beast reported that billionaire Tesla founder Elon Musk is being sued by a Twitter investor who alleges he improperly delayed the announcement of his acquisition of Twitter stock — keeping the share price lower than it would have been so he could buy up more on the cheap.

"The lawsuit, filed in federal court in the Southern District of New York on Tuesday, alleges that the Tesla CEO’s delay artificially dampened Twitter’s share price, cheating out investors who sold stock before he finally disclosed his investment in early April," reported A.J. McDougall and Noah Kirsch. "The plaintiff, Marc Bain Rasella, claims that Musk should have revealed his holdings to the U.S. Securities and Exchange Commission by March 24, as Bloomberg News previously reported. Instead, the billionaire revealed that he had bought up 9.2 percent of Twitter only last Monday — immediately causing shares to jump 27 percent as Muskian acolytes clamored to invest."

"Meanwhile, according to Rasella’s complaint, in dragging his feet to file, Twitter’s most notorious troll managed to scoop up more shares at a deflated price," said the report. "A finance professor cited by The Washington Post last week estimated that Musk made $156 million by buying at the lower price. Rasella purports to represent the class of Twitter’s shareholders who sold their stakes in the week before Musk’s disclosure."

This is not the first time Musk has faced allegations of securities misconduct. In 2018, Musk and Tesla settled for $20 million with the Securities and Exchange Commission after he tweeted that he had "secured funding" to take Tesla private. The SEC later argued for contempt sanctions for Musk for allegedly violating the terms of that settlement by tweeting Tesla could build 500,000 vehicles in 2019.

Musk's acquisition of Twitter shares led some to speculate he could use his power to strong-arm the company into changing content policies that have gotten some right-wing activists banned for hate speech and harassment. Twitter announced soon after the acquisition that Musk had agreed not to join the company's board of directors.

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