Elon Musk (Twitter Shares) Lawsuit - Failure to Disclose Ownership

Investigation

Proposed Claim
Securities Violation

Whether Elon Musk’s failure to disclose his 5% ownership of Twitter on time violates Section 13(d) of the Exchange Act and SEC Rule 13d-1 promulgated thereunder, 17 C.F.R. § 240.13d-1(a).

When Elon Musk filed the required Schedule 13 revealing his ownership stake in Twitter, the company’s shares rose about 27%. Musk may have been motivated to delay the Schedule 13 filing to acquire shares of Twitter less expensively.

Main Event

13G - Owner

04/04/2022

SEC Filing

Elon Musk files a Schedule 13G with the U.S. Securities and Exchange Commission (SEC) revealing an ownership stake in Twitter: 73,486,938 shares held by the Elon Musk Revocable Trust dated July 22, 2003 for which Elon Musk is the sole Trustee, or 9.2% of the company.

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact

Close	Previous close	Price variation	Percentage variation
$49.97	$39.31	$10.66	27.12%

See more on Factual Timeline

Initial Lawsuit

First Complaint - 04/12/2022

This is a federal securities class action on behalf of all investors who sold or otherwise disposed of Twitter, Inc. securities between March 24, 2022, and April 1, 2022, inclusive.

Filing Date
04/12/2022
Class Period
03/24/2022 to 04/01/2022
Transgression
Securities Violation
Filing Firms
Block & Leviton, LLP
Case Title
Rasella v. Musk
Docket Number
1:22-cv-03026
Court
New York Southern District Court
Free File
Complaint

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors that:

(i) Elon R. Musk had acquired a 5% ownership stake in Twitter as required by Section 13(d) of the Exchange Act and SEC Rule 13d-1 promulgated thereunder, 17 C.F.R. § 240.13d-1.