Elon Musk wants to dismiss a lawsuit filed by former Twitter shareholders who said he waited too long to disclose his large ownership stake in the social media company in early 2022, saying “all indications” suggest his delay was a mistake.
In a filing late Wednesday in Manhattan federal court, Musk said it was unbelievable to believe he wanted to defraud shareholders who did not know he had taken a 9.2% stake in Twitter and missed out on bigger gains because he sold his own stock.
Investors in the proposed class action said Musk and his money manager Jared Birchall knew that U.S. Securities and Exchange Commission rules required Musk to disclose that he had bought 5% of Twitter by March 24, 2022, yet they waited 11 more days.
Investors said this enabled Musk to buy more shares at cheaper prices, saving more than $200 million. Twitter, now known as X, rose 27% on April 4, 2022, after Musk disclosed his 9.2% stake.
Musk is the world’s richest person, according to Forbes magazine, and also runs other companies including electric car maker Tesla
In his filing, Musk said he had intended to disclose his Twitter stake in late 2022 but disclosed it immediately after realizing he had misunderstood an SEC disclosure rule.
“This is not a fraudulent scheme,” Musk said. “All indications — including those in the pleadings — point to wrongdoing.”
Musk also denied investors’ claims that an unnamed Morgan Stanley banker helped devise a trading strategy to boost Twitter’s shares without informing the broader market.
Lawyers for investors served by an Oklahoma public pension fund did not immediately respond to requests for comment Friday.
Musk eventually bought San Francisco-based Twitter for $44 billion in October 2022. The SEC has also investigated his Twitter stock purchase.
Last September, US District Judge Andrew Carter refused to dismiss an earlier version of the suit after he found evidence that Musk had understood the SEC’s disclosure and testified about it under oath.
The case is Oklahoma Firefighters Pension and Retirement System v. Musk et al, US District Court, Southern District of New York, No. 22-03026.
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