Tag: jury
Jury rules for Elon Musk in lawsuit trial, clearing him of fraud
The following bad tweet did not, according to a jury in San Francisco on Friday, constitute fraud:
Elon Musk’s famous “funding secured” tweet was, however, thought to constitute fraud by the Securities and Exchange Commission back in 2018. That agency charged Musk with fraud, in the months after he tweeted it, saying he knew any such transaction was much less certain than he was letting on, that he “had not discussed specific deal terms, including price, with any potential financing partners.”
In short, the SEC thought he was lying, sued him, and Musk settled that fraud lawsuit by stepping down as Tesla’s chairman and paying $40 million.
In this latest trial, however, things went his way.
This suit, which also included Tesla and the Tesla board of directors as defendants, had been brought by Tesla Investors, arguing that Musk had injured them financially by giving the false impression that the car company’s stock price would soar to $420 per share in the course of going private.
The market seemingly reacted to the tweet, sending Tesla shares up 11 percent the day he tweeted it, but not to $420 — just $387.46. Then, Tesla stock promptly plunged to around $262 about a month later, around the time Musk went on the Joe Rogan Experience and smoked weed on camera. This drop no doubt resulted in great pain for shareholders, but that pain wasn’t the result of fraud on Musk’s part, according to the jury.
Over three weeks, Tesla and Musk argued that the “funding secured” tweet was actually true, and, for good measure, that the $420 a share thing wasn’t a weed joke, and just happened to be Musk’s best guess as to how the transaction would shake out.
An anonymous male juror stuck around after the trial and explained why the jury accepted Musk’s version of events, telling the New York Times, “There was nothing there to give me an ‘aha’ moment,” and that “Elon Musk is a guy who could sneeze and the stock market could react.
One interesting new detail from the latest proceedings is that we now know Musk did at least talk to one potential financing partner about financing the transaction: the Saudi sovereign wealth fund. Lawyers for the plaintiffs said the meeting minutes from Musk’s interaction with that group showed they weren’t fully on board, and still wanted to know more.
Also, Musk said in order to complete the transaction, he would have done something similar to what he did to buy Twitter: leverage shares of another company he owns a large stake in: in this case, SpaceX.
Elon Musk cleared by jury of deceiving Tesla investors over 2018 tweets
Friday’s top tech news: Jury rules in Elon Musk’s favor in securities fraud trial
Plus fresh details on Meta’s next AI headset, and another smart home company begins its Matter transition.
Jury rules Elon Musk is not liable for shareholder losses after ‘funding secured’ tweets
Elon Musk is off the hook for his 2018 tweets claiming he had “funding secured” to take Tesla private for $420 a share. A jury found that Musk was not liable for Tesla investors’ losses, following a weeks-long trial in San Francisco.
The verdict is a major victory for Musk, who could have been liable for billions of dollars in damages. Musk had testified in federal court that just because he tweets something, it “does not mean people believe it or will act accordingly.” He also argued that he could have used his shares of SpaceX to fund the deal.
The shareholders who brought the class action suit had argued that Musk’s statements about funding were false, and that they lost vast amounts of money due to stock fluctuations in the aftermath of Musk’s tweets. But while the judge in the case concluded that the tweets were “objectively false and reckless,” the jury didn’t find that Musk had deliberately misled the public.
While the verdict ends the years-long saga of the “funding secured” tweets, the posts weren’t entirely without consequences for Musk. He settled with the Securities and Exchange Commission in 2018, and stepped down from his role as Tesla board chair as a condition of the settlement. Musk has long decried the SEC settlement and has said he was “forced to admit I lied to save Tesla’s life.”
In a statement to Bloomberg following the verdict, Musk’s lawyer, Alex Spiro, said “the jury got it right.” Musk also weighed in — naturally, via tweet — saying he was “deeply appreciative.”
Thank goodness, the wisdom of the people has prevailed!
I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.
— Elon Musk (@elonmusk) February 3, 2023
Update 2/3 7:19 PM ET: Added Elon Musk’s tweet about the verdict.
Victory for Elon: Jury Says Tesla ‘Funding Secured’ Tweet Wasn’t Fraud
After around an hour of deliberations, a nine-person-jury in San Fransisco sided with Tesla CEO Elon Musk and said the billionaire was not liable for millions of dollars worth of losses investors laid at his feet following his infamous 2018 “funding secured” tweet about Tesla. The decision marks the end of a dramatic …
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