Investors in Twitter are suing Elon Musk and the social media network for mishandling Musk's $44 billion takeover offer.
Musk is accused of breaking California corporation regulations in a variety of ways, according to the lawsuit.
Musk is accused of "wrongful conduct" in the case, claiming that his "false assertions and market manipulation have generated 'chaos' within Twitter's San Francisco headquarters."
Musk allegedly benefited financially from delaying the disclosure of his considerable position in Twitter and his intention to join the company's board of directors, according to the lawsuit.
The action also claims that other tweets posted by Musk, who has over 95 million followers on Twitter, were "misleading."
This included a tweet in which Musk stated that his takeover attempt for the social media company had been put on hold due to his concerns about the amount of fraudulent accounts on the network.
According to the lawsuit, Musk's tweet on May 13 "constituted an attempt to influence the market for Twitter shares since he knew about the bogus accounts."
Musk "doubled down" on his assertions four days later, according to the lawsuit, by announcing on Twitter that the purchase "cannot go forward."
As of this writing, Twitter shares are trading at about 27% below Musk's $54.20 bid price.
The complaint was launched on Friday, May 27, as Musk "continues to trash the company he wants to buy for $44 billion in an effort to renegotiate the purchase price," according to Frank Bottini, one of the lawyers representing the Twitter investors.
"The lawsuit we filed in San Francisco attempts to hold Musk accountable for his illegal behaviour," Bottini stated.
Musk's tweets about being concerned about the amount of phoney accounts, or bots, on Twitter, according to media experts, were sent because he wants to pay less for Twitter than the $44 billion he agreed to with the company's board in March.
Investor William Heresniak filed the proposed class-action complaint this week in the US District Court for the Northern District of California, claiming to be acting "on behalf of himself and all others similarly situated."