Investor Sues Elon Musk Over His Delayed Twitter Filing

Marc Rasella says he sold shares of Twitter at “artificially deflated prices,” unaware that Musk had made a large purchase in the social media platform.

Elon Musk got a lot of publicity last week after he bought a 9.2% stake in Twitter and became the biggest outside shareholder in the company.

However, the way he bought those shares last week led to a lawsuit this week.

On Tuesday, investor Marc Rasella sued Musk for not disclosing his purchase to the Securities and Exchange Commission sooner.

Rasella claims that Musk’s decision to wait beyond the mandated SEC deadline to disclose his stake caused Rasella to lose money because he sold shares of Twitter at “artificially deflated prices,” unaware that Musk had made a large purchase in the social media platform, according to the complaint.

After Musk disclosed his newly purchased Twitter shares to the SEC in April and became the largest outside shareholder of the company’s stock, its share price rose more than 27%.

“Plaintiff and the Class would not have sold Twitter’s securities at the price sold, or at all, if they had been aware that the market prices had been artificially and falsely deflated by Defendant’s misleading statements,” the lawsuit said.

The lawsuit does not ask for a specified amount in damages but says Musk saved about $143 million by filing his form after the SEC deadline and purchasing shares in the meantime.

Musk didn’t immediately respond to HuffPost’s request for comment.

On Sunday, Twitter CEO Parag Agrawal said in a statement that Musk would not be joining the company’s board after all. Although the position was contingent on a background check, neither Agrawal nor Musk cited that as the reason for the decision.

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