Tesla CEO Elon Musk has been sued for his recently announced Twitter investment. After the lawsuit, the price of Dogecoin (DOGE) fell. Here are the details…
Elon Musk sued
A Twitter shareholder has sued Elon Musk for failing to disclose that he has purchased a significant stake in the company and that it affects share prices. Tesla CEO announced on Twitter on April 4 that he bought 9.2 percent stake. Shares of the social media company soared as investors saw the move as a vote of confidence from the world’s richest man. However, trade laws in the United States require investors to notify the Securities and Exchange Commission (SEC) within 10 days after their investment exceeds 5 percent of their stake in a company. Musk surpassed 5 percent with the shares he bought on March 14, but did not make it public until April 4.
According to the new lawsuit, Musk was able to purchase additional shares at a low price between passing the 5 percent threshold and reporting it to the public. Experts estimate that the delay may have earned Musk $156 million illegally. The lawsuit, filed in New York federal court on Tuesday, seeks class action status on behalf of investors who sold their Twitter shares at the time and lost any gains they would have made had Musk disclosed his stake earlier. Twitter shares rose 27 percent from $39.31 to $49.97 after Musk announced his stake.
Dogecoin price dropped
Plaintiff sold 35 Twitter shares for $1,373, or an average of $39.23, before Musk announced his investments. Jeffrey Block, of the law firm representing the plaintiff, confirmed that the lawsuit was filed Tuesday. The lawsuit seeks a jury trial for unspecified damages and punitive damages.
As we reported on Kriptokoin.com, Twitter announced that Musk would join the board of directors on April 5, but on Sunday, Twitter’s CEO Parag Agrawal suddenly announced that Musk would not join the board. The DOGE price gained momentum for no reason after Musk announced that he had made a purchase on Twitter. Likewise, it fell from $0.142 to $0.1369 today after the court news.
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