X owner Elon Musk wants a New York judge to eject a lawsuit against him, claiming he misunderstood U.S. securities laws and didn’t seek to defraud investors of Twitter, the previous name of the social media platform.
In a Wednesday court filing, Mr. Musk said it was ridiculous to assume he meant to defraud investors who were unaware he held a 9% stake in Twitter.
“This is not a scheme to defraud. All indications — including those in the pleadings — point to a mistake,” he wrote.
The lawsuit claims that Mr. Musk and his financial partners were aware of the securities regulations that would have required him to disclose his 5% share in the company in March 2022. By not disclosing his holdings until the next month, Mr. Musk was able to buy an additional 4% stake in the company for a reduced price, according to the lawsuit.
Once Mr. Musk disclosed his stake, Twitter’s share price jumped 27%.
Mr. Musk went on to purchase Twitter in October 2022 for $44 billion after a lengthy court battle to force the billionaire to follow through with the acquisition.
The Securities and Exchange Commission opened an investigation into Mr. Musk’s pre-Twitter disclosure strategy in 2023, and courts have repeatedly ruled that he must testify before investigators.
Mr. Musk failed to get a similar lawsuit dismissed last year, with the judge finding that the billionaire clearly understood SEC disclosure requirements.
• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.
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