Elon Musk Facing Investigations for Failing to Timely Disclose 9.2% Stake in Twitter

Schubert Jonckheer & Kolbe LLP is launching an investigation of Tesla Executive Elon Musk’s failure to disclose his recently acquired 9.2% stake, or 73.5 million shares, in Twitter (NYSE:TWTR) until 11 days after he was required by the Securities and Exchange Commission (SEC) rules to disclose his ownership over 5% of Twitter’s outstanding stock.

The SEC requires that anyone who has acquired over 5% ownership in a publicly traded company must publicly disclose this information within 10 days of crossing that 5% threshold. Tesla Executive Elon Musk actively acquired Twitter stock starting on January 31, 2022. On March 14, 2022, Musk surpassed the 5% ownership threshold and hence was required to publicly disclose that ownership of Twitter stock by March 24, 2022, via an SEC filing.  But he did not make that filing until 11 days later, on April 4, 2022.

During those 11 days, Musk purchased additional shares of Twitter at prices around $39 per share.  He paid approximately $156 million less for those shares because he had not timely disclosed his earlier purchasers of Twitter stock. Upon finally disclosing his 9.2% stake in the Company on April 4, 2022, Twitter shares surged nearly 30%.

Considering these recent allegations, the Schubert Firm is investigating whether Musk’s failure to disclose his Twitter ownership of over 5% in a timely manner, coupled with his multi-million-dollar profit, is false and manipulative in violation of state and federal laws.

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