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Lawsuit Against Musk, Morgan Stanley

Lawsuit Claims Musk and Morgan Stanley Concealed Twitter Stock Purchases

Posted on June 3, 2024
Writer: James Miller

A shareholder lawsuit alleges that Elon Musk, who secretly acquired a significant stake in Twitter Inc. in 2022 before ultimately buying it, did so with the assistance of a Morgan Stanley banker. The suit claims that Musk received advice on how to avoid alerting the broader market to his purchases.

According to the lawsuit, the unidentified Morgan Stanley banker provided Musk and his business manager with guidance on trading strategies to conceal their activities from public detection. 

The suit further alleges that Musk’s delay in disclosing his ownership stake in Twitter artificially depressed the company’s share price until it was publicly revealed, prompting a significant stock price increase.

Musk’s acquisition of more than 9% of Twitter’s shares without triggering a notable stock price hike is at the center of the lawsuit filed by an Oklahoma public pension fund. 

The suit claims that Musk’s undisclosed ownership had an impact on the market and was part of a larger scheme to acquire Twitter, which Musk later rebranded as X.

Musk has previously argued that the lawsuit lacks legal merit and is an attempt to capitalize on the attention surrounding his acquisition of Twitter. However, a judge ruled that some claims in the case could proceed. The Securities and Exchange Commission is also investigating Musk’s stock purchases.

Neither Musk nor Morgan Stanley immediately responded to requests for comment. Jared Birchall, Musk’s business manager and CEO of Neuralink, also did not respond to requests for comment.

The lawsuit alleges that Morgan Stanley earned nearly $1.5 million in commissions from executing Musk’s stock purchases. 

For more insights, read the full article on Bloomberg.

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