Elon Musk’s huge Twitter investment took a new twist Tuesday with the filing of a lawsuit alleging that the billionaire illegally delayed disclosing his big stake in the social media company so he could buy more shares at lower prices.
The complaint, by a Twitter shareholder, accuses Musk of violating a legal deadline to reveal he had accumulated a stake of at least 5%.
According to the lawsuit, Musk had 10 days to notify the Securities and Exchange Commission that his stake surpassed the threshold.
Instead, according to the complaint, Musk didn’t disclose his position in Twitter until he’d almost doubled his stake to more than 9%.
That strategy, the lawsuit alleges, hurt less wealthy investors who sold Twitter shares in the period before Musk acknowledged becoming a major shareholder.
The investment allowed Musk to become Twitter’s largest shareholder.
The announcement of the lawsuit comes after Twitter’s CEO announced that Musk would not be joining the board after all.