A judge has dismissed a proposed class-action lawsuit against Elon Musk, the world’s second-richest person according to Forbes magazine. The lawsuit claimed that Musk cheated Twitter shareholders several times last year in the course of buying the social media company for $44 billion.
U.S. District Judge Charles Breyer in San Francisco said plaintiff William Heresniak lacked standing to sue because he challenged “wrongs associated with” Musk’s buyout, not the fairness of the buyout itself. Breyer also found no proof that Musk helped two friends then on Twitter’s board, co-founder Jack Dorsey and Silver Lake private equity firm managing partner Egon Durban, breach their fiduciary duties by favoring their own and Musk’s interests.
The judge said letting Dorsey roll over his approximately $1 billion of Twitter shares into an equity stake in the new company merely reduced how much Musk had to pay at closing, and did not “improperly divert” money from other shareholders.
The case was dismissed on Monday, and Musk’s lawyers called Heresniak’s claims “a disjointed laundry list of – often irrelevant – grievances against Elon Musk.” Twitter has since struggled to maintain ad revenue, with some advertisers expressing concern that loosened content rules could leave their ads associated with hate speech or other “wrong messages.” On May 12, Musk named former NBCUniversal advertising chief Linda Yaccarino as Twitter’s new chief executive.