The investor who sued Musk alleges that he broke the law in a scheme to drive down the price of his stock.
The lawsuit was filed in the US District Court for the Northern District of California. It shows how much of Musk's behavior has changed since he agreed to buy the company.
The lawsuit said that the stock value of the company is less than when Musk agreed to buy the company.
The complaint says that Musk acted quickly to try to mitigate the personal risks to himself by engaging in conduct that moved the price of the stock down. Musk's conduct was and continues to be illegal, in violation of the California Corporations Code, and contrary to the contractual terms he agreed to in the deal.
The lawsuit was filed by a Virginia resident and seeks class action status.
AdvertisementOne of the allegations relates to Musk, who said that his Twitter deal was on hold because of his concern about the number of fake accounts.
The lawsuit said that Musk's public statement was false because he knew all about the fake accounts.
Musk has not produced any evidence to prove that less than 5 percent of daily active users are monetizable. According to Musk, at least 20 percent of the accounts are fake, but only accounts that can see ads each day are considered fake.
The investor lawsuit said that Musk's statement was misleading because it implied that Musk's obligation to complete the deal was dependent on his satisfaction with due diligence to determine whether or not fake accounts represent less than 5 percent of users. Musk did not have the right to cancel the deal based on the results of due diligence. Musk was trying to drive the stock price down further by issuing false and negative statements about the company.
The lawsuit said that Musk's false and misleading statements caused the stock of the company to decline in the days following the statement. The lawsuit said that Musk had mentioned the issue of fake accounts on the social network several times in the past.
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