1 year ago
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A US jury has found Elon Musk and Tesla not liable in a securities fraud case over a pair of 2018 tweets that said he “funding secured” to take the electric carmaker private, a claim investors argued cost them billions of dollars.
The decision marks an important victory for Musk, who has aggressively fought any charges that he was guilty and defended his ability to tweet broadly.
The outcome comes after a three-week trial that pitted Tesla investors represented in a class-action lawsuit against Musk, who is CEO of both Tesla and Twitter, which he bought for for $44bn a few months ago.
After three hours of arguments wrapped up on Friday, a nine-person jury began its deliberations and returned their verdict shortly after. The civil case focused on two tweets Musk posted on 7 August 2018 about a Tesla buyout that never happened.
The first tweet, posted just before he boarded his private jet, Musk declared he had “funding secured” to take Tesla private. A few hours later, Musk sent another tweet indicating that the deal was imminent.
The tweets caused Telsa’s stock to surge during a 10-day period covered by the lawsuit before falling back after Musk abandoned a deal in which he never had a firm financing commitment, based on evidence presented during the three-week trial.
Musk appeared in court on Friday for closing arguments, even though his presence wasn’t required, underscoring the importance of the trial’s outcome to him. In closing statements he was both vilified as a rich narcissist whose reckless behavior risks “anarchy” and hailed as a visionary looking out for the “little guy”.
Nicholas Porritt, a lawyer for the Tesla shareholders, urged the jurors to rebuke Musk for his “loose relationship with the truth”.
“Our society is based on rules,” Porritt said. “We need rules to save us from anarchy. Rules should apply to Elon Musk like everyone else.”
Alex Spiro, Musk’s attorney, conceded the 2018 tweets were “technically inaccurate”. But he told the jurors: “Just because it’s a bad tweet doesn’t make it a fraud.”
US district judge Edward Chen, who presided over the trial, decided last year that Musk’s 2018 tweets were false and has instructed the jury to view them that way.
During roughly eight hours on the stand earlier in the trial, Musk insisted he believed he had lined up the funds from Saudi Arabia’s Public Investment Fund to take Tesla private after eight years as a publicly held company. He defended his initial August 2018 tweet as well-intentioned and aimed at ensuring all Tesla investors knew the automaker might be on its way to ending its run as a publicly held company.
“I had no ill motive,” Musk testified. “My intent was to do the right thing for all shareholders.”
In his concluding remarks, Porritt told jurors their decision will boil down to their answer to one question: “Do the rules apply to everyone, or can Elon Musk do whatever he wants and not face the consequences?”
More details soon …
English (US)