Twitter shareholders have filed a class-action lawsuit against Elon Musk, alleging that he manipulated the price of the company’s stock for his own benefit.
U.S. District Judge Andrew Carter ordered Musk to face most of that lawsuit in a decision Monday, and it accuses Musk of violating securities laws by making false and misleading statements about Twitter.
The shareholders allege that Musk used his Twitter account to drive down the price of the company’s stock so that he could acquire it at a lower price. They also allege that Musk engaged in insider trading by buying Twitter stock while possessing material non-public information, though the judge dismissed those charges.
The lawsuit seeks unspecified damages from Musk. It also seeks to have Musk barred from serving as an officer or director of Twitter.
Musk has denied any wrongdoing.
What are the allegations against Musk?
The shareholders allege that Musk violated securities laws by making false and misleading statements about Twitter. The judge upheld shareholder charges that Musk intentionally defrauded them by waiting 11 days beyond the SEC deadline to reveal he had bought 5% of Twitter’s shares. Those allegations still have to be proven in court.
Musk’s lawyers said the richest man in the world is extremely busy and his failure to disclose his purchase of Twitter shares was merely inadvertent.
Elon Musk bought Twitter for $44 billion last October, since changing the name to X.