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Updated at 6:15 PM ET: A jury sided with Elon Musk in a ruling delivered about two hours after arguments closed on Friday.
“Investor’s allegation that Elon Musk violated federal securities laws when he tweeted about possibly taking Tesla private in 2018, giving the billionaire CEO a big win, jury said. was rejected,” reported The Wall Street Journal. “The nine-member jury said the investors who filed the class action failed to prove that Mr. Musk had hurt them by tweeting about a potential deal.
original: The class-action trial over Elon Musk’s false “funds secured” tweets ended today with closing arguments. In August 2018, after he falsely claimed that Musk had secured funds to take Tesla private, a nine-member federal jury found that Musk and Tesla had lost money to investors. You have to decide if you should pay.
Plaintiffs’ attorney Nicholas Porritt said, “To Elon Musk, if he believes it, or even just thought about it, it’s true.” It might work, but that doesn’t matter in this case.But the stock market doesn’t work for listed companies.The stock market has rules that govern what you can and cannot say, and those basic One of the good rules is that what you say must be true and accurate. “
Musk’s attorney, Alex Spiro, blamed investors for today’s losses, accusing them of “gambling and looking for lawsuits as insurance.”
Judge Edward Chen has already ruled that Mr. Musk’s tweets were false and that “Mr. Musk recklessly made such statements.” The first false statement was that he secured the funds to take Tesla private at $420 per share of him. The second statement, in Musk’s follow-up tweet, said, “Investor support confirmed. The only reason this isn’t certain is that it depends on shareholder votes.”
Chen’s written instructions to the jury said that these statements must be assumed “not true,” and that “Mr. Musk acted in reckless disregard for whether the statements were true.” . But the jury must decide “whether he knew the statement was false” and whether the false statement was a material fact to the investor.
Some experts say Musk is likely to lose due to one of the key issues in the lawsuit, the pre-trial ruling.
Investors lost $12 billion because of Musk
The truth emerged that Musk had not secured funding for the privatization transaction, and Musk abandoned the idea because investors did not support it. was the number provided by
On the witness stand, Musk claimed that he believed the money was secured from the Saudi government’s Public Investment Fund (PIF), even though it did not have a signed contract.
In today’s closing arguments, Spiro acknowledged that “funding secured” was “technically incorrect” but that the statement wasn’t that important to investors. “This whole incident is based on bad word choice,” he said.
Juries in the United States District Court for the Northern District of California, especially when taking the side of plaintiffs, can be complicated. If a jury finds her Musk responsible, he determined the “amount of artificial inflation” in Tesla stock proven by the plaintiff each day from August 7, 2018 through August 17. I have to.
The jury will also have to determine the potential liability of members of Tesla’s board of directors, including Musk’s brother, Kimbal Musk. If both Musk and Tesla’s directors are found liable, a jury will have to determine “each defendant’s share of liability for the plaintiff’s loss,” so that the sum equals his 100%. .
You can read the entire 10-page verdict form at this link. A jury selected him on January 17, with opening arguments the following day.
Musk’s defense: Funding was fine
The plaintiff described Musk as a “rich liar” and a “fire-breathing dragon,” Spiro said. , Fraudulent Tweets”. “Just because it’s a bad tweet doesn’t make it a scam.”
Spiro defended Musk’s tweet, saying, “‘Funding secured’ is just a notion that some party had money and expressed interest, and that was undeniably true. ‘ said. Spiro said funding was “never an issue” in previous deals. [transaction].”
According to Spiro, the privatization proposal was not dropped due to lack of funding. Musk stopped pursuing the idea after it became clear that “shareholders want the company to go public,” Spiro said.
“Funds secured,” Musk’s tweet read in full, “Considering taking Tesla private for $420. Funds secured.” Spiro argued that the “under consideration” part of the tweet was more important and that “every reasonable investor has been waiting for more information.”
