Musk Cleared Over Tesla ‘Funding Secured’ Tweets
Jury clears Elon Musk of wrongdoing in class-action lawsuit over 2018 Tesla privatisation tweets plaintiffs said cost them billions
Elon Musk has been cleared of wrongdoing over a pair of August 2018 tweets in which he said he had “funding secured” to return electric carmaker Tesla to private ownership.
Nine jurors took less than two hours on Friday afternoon to reach their decision following the three-week trial, in which investors had argued the tweets were deceptive and had cost them billions of dollars.
Musk had tried to have the trial moved to Texas, where Tesla is now headquartered, but the class-action lawsuit proceeded in a San Francisco court.
The Tesla, SpaceX and Twitter chief executive had previously settled a lawsuit by the US Securities and Exchange Commission (SEC) over the tweets, with Musk and Tesla paying $20 million (£17m) each and Musk agreeing to step down as Tesla chairman.
Stock turmoil
Musk wrote on Twitter he was considering taking Tesla private at $420 a share, further alluding to the deal in a later tweet.
Following the posts the company’s stock price soared over a period of about 10 days before sinking again once it became clear the deal would not materialise.
Musk had argued his messages did not necessarily affect Tesla’s stock price the way he expected.
“Just because I tweet something does not mean people believe it or will act accordingly,” he told the court during about nine hours of testimony over several days.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
‘No ill motive’
“I had no ill motive,” Musk told the court. “My intent was to do the right thing for all shareholders.”
“Thank goodness, the wisdom of the people has prevailed!” Musk wrote on Twitter following the verdict.
“I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”
Musk atended the courtroom for closing arguments, although his presence was not required, indicating the importance of the case for him and Tesla.
‘Anarchy’
Nicholas Porritt, a lawyer for Tesla shareholders, argued that “our society is based on rules” and that rules were necessary to “save us from anarchy”.
“Rules should apply to Elon Musk like everyone else,” he said.
But Musk attorney Alex Spiro, while conceding the 2018 tweets were “technically inaccurate”, said: “Just because it’s a bad tweet doesn’t make it a fraud.”
Following the verdict Porrit said, “We are disappointed with the verdict and are considering next steps.”
