Billionaire entrepreneur Elon Musk is in legal trouble once again. A U.S. judge has denied his request to dismiss a lawsuit that accuses him of misleading former Twitter shareholders by delaying the disclosure of his investment in the social media giant, now rebranded as X.
On March 28, U.S. District Judge Andrew Carter in Manhattan ruled that the plaintiffs had provided enough evidence to support their claims that Musk deliberately withheld critical information about his stake in Twitter. According to the lawsuit, Musk violated SEC regulations by waiting 11 days beyond the required deadline to disclose his 9.2% ownership of Twitter, giving him a financial advantage while keeping shareholders in the dark.
How Musk’s Actions Allegedly Saved Him Millions
The lawsuit, led by the Oklahoma Firefighters Pension and Retirement System, alleges that Musk should have revealed his 5% ownership of Twitter by March 24, 2022. Instead, he delayed the disclosure until April 4, 2022. During this period, Musk continued to buy Twitter shares at lower prices, allegedly saving himself over $200 million while harming investors who sold their stocks at undervalued rates.
When Musk finally revealed his stake in Twitter, the company’s stock price surged by 27%. The plaintiffs argue that had Musk disclosed his holdings earlier, shareholders could have benefited from the price jump.
Misleading Tweets and a Questionable Filing
The lawsuit also highlights two tweets from Musk on March 26, 2022. In one, he hinted at creating a rival social media platform, and in another, he joked about buying Twitter and replacing its bird logo with the Doge meme. While Musk’s lawyers argue that these tweets were just casual remarks, Judge Carter found them significant, stating that they could be seen as an attempt to manipulate investor perception.
Additionally, the court ruled that Musk’s disclosure of his Twitter stake was misleading because it classified his investment as “passive”—suggesting he had no intention of acquiring the company. Yet, just months later, Musk bought Twitter for $44 billion, contradicting that filing.
SEC Lawsuit and the Road Ahead
The U.S. Securities and Exchange Commission (SEC) has also sued Musk over the delayed disclosure, further complicating his legal battles. Judge Carter did dismiss some aspects of the lawsuit but left the core allegations intact, meaning Musk will still have to fight this case in court.
As one of the most influential figures in tech and finance, Musk’s actions have always drawn public and regulatory scrutiny. This lawsuit raises serious questions about corporate transparency and whether influential investors should be held more accountable for their market moves.
Do you think Musk’s actions were intentional, or was it just an oversight? Share your thoughts in the comments below!
