Elon Musk was ordered by a US judge to face most of a lawsuit claiming he defrauded former Twitter shareholders last year by waiting too long to disclose that he had invested in the social media company, which he later bought and renamed X.
In a decision made public this week, US District Judge Andrew Carter said shareholders in the proposed class action could try to prove that Mr Musk intended to defraud them by waiting 11 days past a US Securities and Exchange Commission deadline to reveal he had bought 5 per cent of Twitter's shares.
The judge in Manhattan also dismissed an insider trading claim against Mr Musk, the world's richest person.
Lawyers for Mr Musk did not immediately respond on Tuesday to requests for comment.
Shareholders led by an Oklahoma firefighters pension fund said Mr Musk saved more than $200 million by adding to his Twitter stake, and quietly talking with its executives about his plans, before finally disclosing a 9.2 per cent stake in April last year.
The shareholders also said they sold Twitter shares at artificially low prices because Mr Musk hid what he was doing.
Mr Musk's lawyers argued that their client was “one of the busiest people on the planet” and that any disclosure failure was “inadvertent”.
Mr Carter said he could not infer that Mr Musk was “too busy” to comply with SEC rules if he could find time to buy Twitter shares, meet company executives and post online about Twitter.
He also found evidence that Mr Musk understood the 5 per cent disclosure rule, including that he had given evidence about it under oath and had properly disclosed stakes in his electric car maker Tesla and the former SolarCity at least 20 times.
Katie Sinderson, a lawyer for the plaintiffs, declined to comment.
Mr Musk bought Twitter for $44 billion last October.
Under the SEC rule, investors have 10 days to disclose when they have acquired 5 per cent of a company.
Twitter shares rose 2 per cent on April 4 last year to $49.97 from $39.31, after Mr Musk revealed his 9.2 per cent stake. Mr Musk's takeover valued Twitter at $54.20 per share.
More coverage from the Future Forum
57%20Seconds
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Rusty%20Cundieff%0D%3Cbr%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3EJosh%20Hutcherson%2C%20Morgan%20Freeman%2C%20Greg%20Germann%2C%20Lovie%20Simone%0D%3Cbr%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E2%2F5%0D%3Cbr%3E%0D%3Cbr%3E%3C%2Fp%3E%0A
Venom
Director: Ruben Fleischer
Cast: Tom Hardy, Michelle Williams, Riz Ahmed
Rating: 1.5/5
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
THE%20SWIMMERS
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ESally%20El-Hosaini%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3ENathalie%20Issa%2C%20Manal%20Issa%2C%20Ahmed%20Malek%20and%20Ali%20Suliman%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%3C%2Fp%3E%0A
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
