In a document dated Wednesday evening, the Twitter owner claims that he did not maliciously fail to disclose something to the US Securities and Exchange Commission (SEC).

What did Musk forget? He failed to disclose to the SEC that he had acquired a significant stake in the social media company before it was taken private. He had a rather messy takeover of Twitter, and there was a period when Musk tried to block the deal so he could get together with a group of investors to acquire a multi-billion dollar stake in Twitter. The former shareholders sued Musk for this, claiming that they had lost profits due to the late disclosure, as Twitter’s share price had risen 27% after his position became public, and he asked for the case to be dropped and denied the fraud allegations.

This was first reported by Reuters. The lawsuit was filed against him in September last year, alleging that the billionaire hid and misrepresented his role, which allowed him to gain a larger stake in Twitter by influencing its operations. He first bought shares in the birdy platform in January 2022 and by early April had already spent 2.6 billion, having bought around 42 million shares on March 14, giving him more than 5% ownership. That alone would have required him, under SEC law, to disclose his position within 10 days so that other investors in Twitter could be informed that the company was in his crosshairs. He failed to do so and just bought more shares, but because their value remained unchanged, the investors who filed the lawsuit claim Musk saved more than $200 million…

Musk denies the allegations, and his document says there is a “mistake” in the evidence, which he quickly corrected once it was clear there was a violation of Section 13 of the Securities and Exchange Act. Once Musk disclosed his holdings, he did so by filing a 13G form with the SEC, which he used to avoid having to disclose his intentions. According to investors, he should have filed a 13D form because he wanted to influence Twitter’s operations. Musk even denies that he worked with the bank Morgan Stanley to buy Twitter shares in such a way that the market didn’t find out about his plans. He first refused to attend hearings set by the regulator, then finally agreed to do so in May.

In short, Musk secretly bought Twitter shares to the detriment of older shareholders, and he denies it all…

Source: WCCFTech, Wall Street Journal