Tesla Inc (NASDAQ:TSLA) and SpaceX CEO Elon Musk is being sued by an investor for failing to disclose his stake in micro-blogging platform Twitter, as required by US law.
Marc Bain Rasella filed a lawsuit in a Manhattan federal court on behalf of "all investors who sold or otherwise disposed of Twitter, Inc. securities between March 24, 2022 and April 1, 2022, inclusive," according to media reports.
The lawsuit claims Musk began purchasing Twitter shares in January and by March 14 owned over 5% of the company.
According to the lawsuit, Musk was required to file a Schedule 13 with the Securities and Exchange Commission when is stake reached 5%.
SEC regulations require investors to file a Schedule 13 within 10 days of reaching the 5% threshold.
Musk filed the filing after taking a 9.2% stake in Twitter, it is claimed.
The lawsuit claims this hurt less wealthy investors who sold their shares shortly before Musk acknowledged owning a stake in the San Francisco company.
Regulatory filings show Musk acquired 620,000 shares for US$36.83 apiece on January 31, and continued to buy shares on nearly every trading day until April 1. The CEO of Tesla cars owned 73.1mln Twitter shares as of Monday's count, representing 9.1% stake, the reports said.
Musk, who acquired the stake in the micro-blogging platform for nearly US$3bn, is limited from buying more than 15% of Twitter's stock.