Thousands of Twitter investors on Friday received class certification in a lawsuit alleging that Elon Musk incited uncertainty about the company’s takeover bid to drive down the company’s stock price.
Judge Charles R. Breyer, during a motion hearing in the U.S. District Court for the Northern District of California, said he was satisfied that the plaintiffs met the federal standard for class certification. He has appointed Cotchett, Pitre & McCarthy and Bottini & Bottini as class counsel, and Nancy Price, John Garrett, and Brian Belgrave as class representatives.
Investors allege that Musk violated securities laws when he took steps to lower Twitter’s stock price in order to renegotiate the $54.20 per share purchase price. The plaintiffs claim they suffered significant financial losses when they sold their Twitter shares at artificially low prices.
According to Breyer, this class consists of all individuals and entities that sold publicly traded stock, call options, or purchased put options on Twitter between May 13, 2022 and October 4, 2022. It is said that it will be done. Other people who have suffered similar damage to the plaintiff are also eligible.
The plaintiffs asked Breyer for certification in May, arguing that certification is appropriate because the class is large enough, the lead plaintiffs are “well represented,” and their claims are common to the class. He claimed that.
Musk refuted this argument in a Sept. 2 brief opposing certification, stating that the class has not established predominance, that the lead plaintiff is atypical and inappropriate, and that the class is defined and damages. It argued that the restitution model fell short of Federal Rule of Procedure 23. .
The plaintiffs allege that Musk’s failure to disclose when his stake in Twitter exceeded 5% and his public statement that he was suspending the acquisition agreement artificially depressed Twitter’s stock price. . Investors Steve Garrett, John Garrett, Price and Belgrave collectively sold 28,389 shares of Twitter stock at an artificially inflated price during the class period for $558,000. He claims to have suffered more than that amount of loss.
The U.S. Securities and Exchange Commission is also seeking information in a separate lawsuit about Musk’s purchase of Twitter stock and statements he made about investments ahead of his $44 billion purchase of the social media platform.
The class is represented by Cotchett Pitre & McCarthy LLP and Bottini & Bottini Inc. Quinn Emanuel Urquhart & Sullivan LLP represents Musk.
The case is Pampena v. Mask, ND Cal., No. 3:22-cv-05937, September 27, 2024.