Plaintiffs have named Morgan Stanley (NYSE:MS) in an updated lawsuit against Elon Musk that accuses the billionaire mogul of secretly acquiring a significant stake in Twitter at artificially low prices by failing to disclose his ownership interest when required by law.
The lawsuit alleges that Musk, along with his wealth manager Jared Birchall, developed a covert strategy orchestrated with the assistance of a managing director at Morgan Stanley (NYSE:MS).
The strategy allegedly involved complex, algorithmic trading designed to keep Musk's acquisitions under the radar, thereby preventing a rise in Twitter's stock price, the suit claims.
“Musk, along with his wealth manager, Jared Birchall, schemed to violate Musk’s disclosure obligations so they could secretly build a massive position in Twitter at artificially low prices while deceiving investors,” the complaint alleges.
“To assist in their scheme, Musk and Birchall enlisted a longtime business partner and managing director at Morgan Stanley, to help give effect to their scheme by orchestrating a secret, algorithmic trading strategy for Musk to acquire billions of dollars of Twitter securities without tipping off the market.”
Twitter’s now-delisted shares surged when Musk disclosed his interest in Twitter in April 2022.
Lead plaintiff, the Oklahoma Firefighters Pension and Retirement System, claim investors who sold their Twitter shares before the disclosure were misled and suffered substantial financial losses as a result.
The lawsuit, case number 1:22-cv-03026, was first filed in April 2022.