Twitter investors have sued Elon Musk for delaying the disclosure of his stake in the platform, as the SpaceX owner completes a $44 billion (£34.9 billion) buyout of the company.
Filing a lawsuit on Wednesday in San Francisco federal court, investors claimed that Musk saved himself $156 million (£123.6 million) by failing to announce that he had bought more than a 5% stake of Twitter by 14 March. They then asked to be reimbursed for ‘punitive and compensatory’ damages.
The news comes just days after the platform was fined $150 million by the Federal Trade Commission (FTC) for ‘deceptively’ using account security data for targeted advertising.
According to The Guardian, Musk continued to by stock after the 14 March and eventually announced that he owned 9.2% of the company in early April.
READ MORE: Reactions: Elon Musk’s acquisition of Twitter
Lead by William Heresniak, investors said that “By delaying his disclosure of his stake in Twitter, Musk engaged in market manipulation and bought Twitter stock at an artificially low price.”
Twitter, Musk and retrospective lawyers have declined to comment on the matter.
The investors have also claimed that Tesla’s recent drop in share value will put his acquisition of Twitter in “major peril”. Tesla shares are down $1,000 in April to $700 earlier this week.
This is not the first investigation into the timing of Musk’s stake disclosure as according to the Wall Street Journal it triggered an investigation by the US Securities and Exchange Commission (SEC) earlier this month.
Despite this and his investigation of spam bots on the platform, Musk funded an extra $6.3 billion in equity financing on Wednesday to further fund his acquisition of Twitter.
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