Elon Musk Takes Stand in Securities Class Action Trial, Says Key Tweet "May Not be My Wisest"

Elon Musk discusses past tweets, bots as he testifies at Twitter shareholder trial

Elon Musk took the stand in a shareholder trial on Wednesday in San Francisco, where he’s accused of making false and misleading statements that drove down Twitter’s stock price before he bought the social media platform for $44 billion in 2022. […]

The billionaire Tesla CEO reached a deal to buy Twitter and take it private in April 2022. On May 13, however, he declared his plan “temporarily on hold” and said he needs to pinpoint the number of spam and fake accounts on the platform. […]

Twitter’s stock tumbled as a result. A few days later, he tweeted that the deal “cannot go forward” and claimed that almost 20% of Twitter accounts were “fake,” according to the lawsuit.

Wearing a black suit and tie, Musk said he didn’t think it was “material” when, in early 2022, he began amassing Twitter stock and did not tweet about it or disclose to the Securities and Exchange Commission. He said he’s bought stock in “many companies” and did not post about it.

Once he did, Twitter’s stock jumped 27% in one day.

Is Jeffrey Epstein securities fraud?

Jeffrey Epstein was bad. These days, it is bad for business to have been pals with Jeffrey Epstein. Quite a few public company executives were pals with Jeffrey Epstein. The lawsuits write themselves, though I think this is the first one I have actually seen:

“Shareholders sued Apollo Global Management and its billionaire co-founders Leon Black and Marc Rowan on Monday in a proposed class action for allegedly defrauding them for nearly five years about the private capital firm’s business dealings with disgraced sex offender and financier Jeffrey Epstein.”

“According to a complaint filed in Manhattan federal court, the shareholders alleged the defendants falsely denied in several regulatory filings in 2021 and 2022 ever ?doing business with Epstein, though Epstein “was heavily involved and frequently communicated with Apollo Global’s senior leadership” about Apollo’s business during the 2010s.” […]

Here, the complaint says that Apollo lied about the extent of its Epstein ties, but “the truth [began] to slowly materialize and emerge through partial disclosures” beginning on Feb. 1. And in fact, Apollo’s stock is down almost 20% since the start of February. Is that because of what the market has learned about Apollo’s Epstein ties? Well. Some other stuff is going on, in the alternative investment management space. Blackstone Group Inc., KKR & Co. Inc. and Blue Owl Capital Inc. are all down more than Apollo during that period. There will presumably be some arguments over loss causation. But “Apollo had some Epstein ties, they came out and the stock dropped 20%” is a pretty irresistible combination for a securities class action lawyer.

MrBeast Video Editor Fired From Beast Industries Following Kalshi Insider Trading Probe

Beast Industries, the firm behind YouTube star MrBeast’s growing media and consumer goods empire, has fired a video editor for insider trading following an internal investigation.

Employees were recently informed about the former video editor’s termination via an email, which further underscored the company’s strict stance against abusive behavior on prediction markets among staff, a source familiar with the matter told Decrypt.

The individual, Artem Kaptur, was suspended last week after Kalshi unveiled an enforcement action against him. The prediction market platform determined that he likely used knowledge about the content of MrBeast’s videos with “near-perfect trading success on markets with low odds,” which was flagged by Kalshi’s surveillance systems.

SEC Enforcement Division Revises Its Playbook: What the Updated Manual Signals About Enforcement Practices and Defense Strategy

Director-Level Approval Required for Wells Notices

The revised Manual formalizes the requirement that issuance of a Wells notice now requires two levels of approval: “an Associate Director’s or Unit Chief’s approval and then approval from the Office of the Director.” While not required under the prior Manual, recent Enforcement Directors in practice required that staff provide prior notification of, and the opportunity to, review Wells notices before they were issued. This typically functioned as a negative-consent mechanism to identify and elevate for additional review those matters that turn on novel or doubtful legal theories or present unintended policy concerns. Under the updated Manual, the current and future Directors may follow the same process, which would not necessarily involve a detailed review of the merits of the underlying case. If this continues to be how things work, then the specified approval process simply codifies past practice.

However, if the introduction of the formal requirement of Director approval signals an expectation on the part of the Commission that the Director’s Office perform detailed review of each case—and, where appropriate, consult the Commission before a Wells notice is authorized—then this change could have significant consequence for future practice. First, it could create a bureaucratic logjam that slows the progress of investigations towards charging decisions. Second—and ironically—it could prompt senior leadership of the Division (and, in some cases, the Commissioners themselves) to form firm views on the merits of a case before potential respondents have an opportunity to present any meaningful advocacy….