Twitter stock manipulation lawsuit against Musk moves forward: What's next?
What's the story
Elon Musk has lost a legal battle against an investor lawsuit, alleging he manipulated the stock price of Twitter before acquiring it in 2022.
The lawsuit claims Musk concealed the amount of stock he had acquired, which allegedly inflated Twitter's market value artificially.
A federal judge in Manhattan has now allowed investors to proceed with their allegations against the billionaire entrepreneur.
Fraud allegations
Musk accused of securities fraud
Investors can now proceed with their allegations that Musk committed securities fraud.
The allegations include failing to make timely disclosures to the US Securities and Exchange Commission (SEC), posting misleading posts about Twitter's future, and executing a "coordinated trading strategy" to quietly increase his stake in the social media company.
Tweet evidence
Tweets play a crucial role
The judge's ruling was heavily swayed by a number of Musk's tweets, in which he openly debated whether to go ahead with the Twitter purchase.
In March 2022, he had asked Twitter users if they thought there were too many fake or spam accounts on the platform.
US District Judge Andrew Carter Jr. ruled that some of those tweets supported fraud claims, while others did not.
Defense argument
Lawyers argue case lacks legal merit
In a bid to get the case dismissed, Musk's legal team argued that it has no legal merit and is just an attempt to capitalize on the media attention around him and his $44 billion Twitter acquisition.
They claimed that their client had "done nothing wrong" in this case.
These arguments were made as part of their defense against the securities fraud allegations.
SEC lawsuit
Musk faces similar allegations in SEC lawsuit
Musk is also facing similar allegations in a lawsuit filed by the SEC related to the same general set of issues.
His attorney Alex Spiro had previously said that his client has "done nothing wrong" and accused the SEC of pursuing minor violations that usually carry insignificant penalties.
Apart from these legal battles, Musk is also scheduled for a deposition next week in another investor suit related to his Twitter acquisition.