Initial Lawsuit
First Complaint - 05/25/2022A shareholder filed this class action on behalf of all stockholders of Twitter, Inc., who have been harmed by the actions of defendant Elon R. Musk. Plaintiff asserts claims against defendant Musk for violations of California Corporations Code §§ 25400, 25401, 25500, and 25501 and against defendant Twitter, Inc. for declaratory, injunctive relief, and unjust enrichment.
- Filing Date
05/25/2022 - Transgression
Securities Violation - Filing Firms
Bottini & Bottini, Inc.
Cotchett, Pitre & McCarthy, LLP - Case Title
Heresniak v. Elon R. Musk and Twitter, Inc. - Docket Number
3:22-cv-03074 - Court
California Northern District Court - Free File
Complaint
Allegations
Excerpt
1. Defendant Musk purchased or offered to purchase Twitter securities and/or willfully participated in the relevant manipulative transactions for the purpose of inducing the purchase or sale of Twitter securities by others. After purchasing over 9% of Twitter’s shares, and entering into a contract to purchase the remaining stock of Twitter he does not already own for $54.20 per share, Defendant Musk has willfully participated in making statements that were false and misleading, or that omitted material facts necessary to make the statements made not false or misleading. Musk knew such statements were false and misleading as detailed herein.
Through such conduct, Defendant Musk also violated Corp. Code Section 25400(b) by effecting, alone or with one or more other persons, a series of transactions in Twitter securities creating actual or apparent active trading in such securities or raising or depressing the price of such securities, for the purpose of inducing the purchase or sale of such securities by others.
As a result of Defendant’s misconduct, plaintiff and the other members of the Class have
suffered damages and been harmed. The fair market value of Twitter securities has been adversely affected by Musk’s false statements and wrongful conduct.
2. Defendant Musk offered to purchase and/or purchased securities from plaintiff and members of the Class in and from this state by means of written and oral communications that included untrue statements of material fact and omitted to state material facts necessary to make the statements made, in light of the circumstances under which the statements were made, not misleading.
Defendant Musk failed to exercise reasonable care to ensure the truth and accuracy of such statements, and plaintiff had no knowledge of the falsity of such statements.
As a direct and proximate result of Defendant’s violations of law described herein, plaintiff and members of the Class have been damaged.
3. A justiciable, present controversy exists between the parties. Defendant Musk signed a binding contract to buy Plaintiff’s stock for $54.20. But Defendant Musk thereafter publicly stated that the Buyout is “temporarily on hold” and “cannot go forward” until certain conditions are met.
The conditions Musk that has stated must be met before the Buyout can go forward do not appear to be part of the contract he signed with Twitter, Inc. Plaintiff thus seeks a declaration concerning these facts and issues and the parties’ respective rights and obligations. Plaintiff also seeks appropriate injunctive relief to be determined by the Court.
4. Plaintiff seeks a declaratory judgment that Musk has violated Section 25402 and that Defendant Twitter has an obligation to investigate Musk’s conduct and take appropriate action.
Plaintiff does not seek any damages on behalf of Twitter and this claim is not brought as a derivative claim.
Defendants
- Owner
Elon R. Musk - Company
Twitter, Inc.
