Judge Breyer has dismissed a year-long Twitter shareholder lawsuit against Elon Musk that accused him of defrauding other shareholders.
US District Judge Charles Breyer of San Francisco rejected shareholder suit Elon Musk is challenging Twitter Purchase. On Monday, Breyer ruled that the reference in which Musk maintained the suit lacked standing. Plaintiff William Heresniak filed the suit, according to District Judge Tesla CEO for his Twitter complaints about the buyout, not the fairness of the buyout. Breyer further said that Herceniak failed to prove how the delay in disclosure of Musk’s 9.2% Twitter stake affected share prices.
Heresniak has claimed that Musk’s delayed stake disclosure allowed the billionaire businessman to buy more shares at a lower price before the purchase was announced.
Court ruling comes a year after Twitter shareholder lawsuit
Judge Breyer’s ruling comes a year after the shareholder lawsuit, shortly after Twitter accepted his offer of $54.20 per share. At the time, the plaintiffs alleged that the Tesla CEO repeatedly defrauded Twitter shareholders last year when he bought the company.
In addition to clearing Musk of wrongdoing, Judge Breyer ruled that Musk did not breach Twitter’s fiduciary trust with the two friends. Breyer said there is no evidence Tesla CEO helped then-board members jack dorsey and that Egon Durban of Silver Lake violated his fiduciary duties by pursuing selfish interests. According to the judge, Dorsey eased the financial strain of the acquisition price by rolling over his billions of dollars worth of Twitter stock into an equity stake in Musk’s new company. Furthermore, Breyer said that neither Musk nor his business partners “improperly diverted” money from other Twitter shareholders.
As of press time, attorneys representing Musk and Twitter on the shareholder lawsuit had not yet commented on the decision. However, in early March, lawyers described Heresniak’s claims as an “unconnected laundry list” of complaints against Musk.
Since taking over Twitter last October, Musk has launched a plan to increase the company’s profitability. Tesla’s CEO has begun monetizing multiple services, even as the social media giant loses advertising revenue. The primary reason for the decline in advertising revenue is that advertisers are concerned that the new approach to ‘freedom of expression’ may affect products and services. For example, some advertisers are concerned that their ads may be associated with hate speech or ‘politically incorrect’ messages.
Musk resigns as CEO of Twitter
Less than two weeks ago, Elon Musk announced will step down as CEO of Twitter in late June. However, Musk will remain the company’s executive chairman and chief technology officer.
Linda Yacarino is replacing Musk as CEO. He previously served as a senior advertising executive at NBCUniversal. Yacarino’s appointment is welcome because observers believe his guiding presence will allow Musk to focus on other obligations. The outspoken businessman has long teased his CEO role on Twitter after a suitable replacement has been found. Last December, Musk polled his followers on whether he should stay in office or leave. 57.5% of the vote called for Tesla’s CEO to step down.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip crypto stories down to the basics so that anyone anywhere can understand without a lot of background knowledge. When he is not delving deep into crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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