The Oklahoma Firefighters Pension and Retirement System and other plaintiffs in the suit complained that they had sold shares of then publicly-traded Twitter at "artificially deflated prices," while Musk obscured his own interest and stake in the company.
Elon Musk and Jared Birchall did not immediately respond to a request for comment.
Musk's attorneys have argued that while his disclosure was filed after an SEC-mandated deadline, this was merely an error and that the tech magnate did not commit nor intend securities fraud.
In his opinion, Judge Andrew L. Carter in the Southern District of New York wrote that the court agreed with plaintiffs that Musk's failure to disclose he was snapping up shares of Twitter sent a "false pricing signal to the market."