WEBVTT

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(upbeat chime music)

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- [Announcer] Last
month, famed, billionaire

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and internet troll, Elon
Musk, secretly purchased stock

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in Twitter that sent the price soaring

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after it became public.

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Musk bought massive amounts of
shares of the social network

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on March 24th, but the
public didn't know about it

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until April 4th.

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Well, yesterday Twitter
investor Marc Rasella,

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filed a lawsuit in federal court alleging

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that Musk's failure to
disclose his purchase

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of 9.2% of Twitter stock caused Rasella

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and his fellow investors to lose money.

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SEC rules state that
large purchases of stock

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must be reported to the regulatory agency

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through the filing of a Schedule
13 after anyone acquires

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more than 5% of a company.

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Musk didn't report his
purchases until April 4th,

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10 full days after he should have.

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Twitter stock went up 27%
after Musk finally filed

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the correct paperwork.

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Rasella sold shares during the period

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when Musk's purchase was a secret

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and he wants his lawsuit
to get class action status

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involving anyone who sold their shares

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when Musk was in violation of the law.

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Musk was supposed to join
Twitter's board of directors

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this week, but ducked
out at the last minute.

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There's speculation he may want to pursue

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an even larger portion of the company.

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Something he would've
been prohibited from doing

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if he joined the board.

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So, where's the SEC in all of this?

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We'd put money on Musk only
getting this small fine

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and no jail time.

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The rich gate richer.

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To read more about the
story, check out gizmodo.com.