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…
2023-02-03 18:24:34
Source from www.engadget.com In a stunning ruling, a jury of twelve ruled unanimously against plaintiffs, concluding that Elon Musk was not liable for losses incurred by shareholders after his infamous “funding secured” tweets in August 2018.
In August 2018, Elon Musk issued a seemingly innocuous tweet claiming that he had “secured” funding for a potential buyout of Tesla Motors. The tweets sent Tesla’s stock price soaring and triggered an investigation by the Securities and Exchange Commission (SEC) over alleged securities fraud.
The SEC eventually settled with Tesla and Musk, with the financial penalties amounting to $20 million in fines and the CEO being forced to step down as chairman of the company. However, the settlement did not address the potential liability of the company or its CEO for losses incurred by shareholders due to the tweets.
That changed on Thursday when a jury of twelve unanimously ruled that Musk was not liable for the shareholder losses resulting from the funding secured tweets. The ruling came after five days of testimony at the San Francisco Superior Court and marks a major victory for the eccentric CEO of Tesla Motors.
The ruling is also a far cry from the initial lawsuit filed by shareholders in September 2018 that sought to hold Musk liable for the losses they suffered due to his tweets. The suit alleged that Musk had engineered a stock pump and dump that netted him millions of dollars in profits at the expense of his shareholders.
But the jury ultimately sided with Musk and found that his tweets were not the source of the losses, citing a lack of evidence to link the tweets with the subsequent drop in Tesla’s stock price.
As the ruling comes to a close, it looks to be an all-around victory for the CEO and founder of Tesla Motors. The upshot is that shareholders will not be able to recoup their losses from the much-publicized tweet. But for Musk, the decision marks a vindication of sorts after months of legal turmoil and uncertainty.