A US court has allowed investors to file a class action lawsuit against Elon Musk
This is according to Reuters.
The plaintiffs claim that the billionaire deliberately delayed disclosing details of his acquisition of a 5% stake in the social media platform in March 2022. Instead of meeting the statutory deadline, Musk only disclosed the information 11 days later, by which time his stake had already reached 9.2%.
According to the prosecution, this delay allowed the businessman to save over $200 million, as he continued to buy up shares at a lower price. Meanwhile, other investors, unaware of Musk’s plans, were selling off their shares en masse.
Judge Andrew Carter noted that the company owner’s silence and his public musings about creating a rival platform could have misled the market and influenced the value of the securities.
Despite the defence’s objections regarding the lack of direct evidence of fraud, the court sided with the plaintiffs, recognising as reasonable the assumptions regarding the impact of Musk’s actions on shareholders’ financial losses.
The exact amount of damages is currently being determined, but the judge’s ruling paves the way for a major legal battle that could force the owner of X to pay compensation for market manipulation.
