Elon Musk is being sued by a Twitter shareholder for allegedly delaying disclosing his stake in the app in a bid to buy more for less.
The Tesla and SpaceX CEO was recently revealed to have a 9.2% share in Twitter, worth $2.6 billion.
According to filings, Musk purchased around 620,000 shares at $36.83 a pop on 31 January and continued to buy them up until 1 April.
Now, a complaint has been filed in New York federal court by his fellow shareholder, Marc Bain Rasella, who has accused the multi-billionaire of violating a regulatory deadline.
It adds how Musk gave “materially false and misleading statements and omissions” by not making his investment public knowledge by 24 March.
The 50-year-old business magnate didn't disclose his share until 4 April, when the stock grew by around 27 percent.
And Rasella, therefore, feels that other investors missed out on the opportunity to buy cheaper shares, by letting Musk continue to purchase them.
The lawsuit read: “By failing to disclose his ownership stake ... Musk was able to acquire shares of Twitter less expensively during the Class Period."
Rasella is seeking "unspecified compensatory and punitive damages."
The legal case comes after Twitter announced Musk had decided not to join its board of directors after it was announced that he would take on the role on Tuesday, April 12.
Chief executive Parag Agarwal clarified: “We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance. Elon’s appointment to the board was to become official effective 4/9, but Elon shared that same morning that he will no longer be joining the board."
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