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Elon Musk faces lawsuit over ‘secret’ Twitter stock purchase

The Oklahoma Firefighters Pension and Retirement System filed an amended lawsuit in Manhattan against Morgan Stanley, accusing it of assisting Elon Musk in secretly acquiring more than 9% of Twitter (now X).

The lawsuit claims that a Morgan Stanley banker advised Tesla owners how to continue buying Twitter shares without notifying the entire market, Bloomberg reported.

According to the lawsuit, Musk’s failure to disclose that he owned more than 5% of Twitter kept the stock price artificially low and allowed Musk to acquire more than 9% of Twitter without the market reacting. Twitter’s stock price eventually rose sharply when Musk’s stake became public.

He had to disclose a stake of more than 5% in the social media site by March 24, but he failed to do so and instead reported a stake of more than 9% on April 4. On April 4, the company’s stock price rose 27%.

Elon Musk’s Defense

Elon Musk argued last year that the lawsuit was without merit and should be dismissed, saying it was simply an attempt to “exploit the spectacle” of his $4 billion purchase of the site. However, in September, a judge ruled that the amended lawsuit could proceed.

Msuk had worked with Morgan Stanley several times before, and the lawsuit claims they earned nearly $1.5 million in commissions while executing the billionaire’s “secret Twitter stock acquisition plan.”

The unnamed Morgan Stanley banker worked directly with Musk and his business manager Jared Birchall, who is also the CEO of Musk’s Neuralink, to cover up Musk’s ongoing stock purchases. The lawsuit alleges that the banker provided updates on “trading strategies to avoid public discovery” and “the amount of money ‘saved’ by hiding these transactions from the market.”

Musk has come under scrutiny for the acquisition and was ordered by a federal judge to answer questions about his acquisition of Twitter because he had previously refused to be interviewed.

Featured Image Credit: Midjourney

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