TechEnvoke
A jury finds that Musk and Tesla are not at fault after Musk falsely claimed in a 2018 tweet that he had secured financing to go private.
Stock prices originally rose when Tesla CEO Elon Musk announced in 2018 that money was in place to take the business private before falling after the plan failed. Investors sued him in January, but after a protracted civil trial lasting several weeks, the jury decided on Friday that Musk was not responsible for stock-related losses.
It came down to analyzing what Musk had meant in detail. Musk had said that he was thinking about taking Tesla private in the first tweet cited in the trial and included the phrase “Funding secured.” He added that the idea would be put to a shareholder vote in a subsequent tweet that stated, “Investor support confirmed.”
Investors sued Musk for financial losses when the privatization failed. According to The Washington Post, the company’s and its CEO’s attorneys contended throughout the trial that even though the financing tweet wasn’t factual, it didn’t necessarily amount to fraud.
The decision follows Musk and Tesla’s $40 million payment and consent to increased governance in response to the Securities and Exchange Commission’s lawsuit against them in 2018 over the “funding secured” tweet. It’s just one of many times that Musk, who now controls Twitter, has gotten into trouble over a tweet.
The decision follows Musk and Tesla’s $40 million payment and consent to increased governance in response to the Securities and Exchange Commission’s lawsuit against them in 2018 over the “funding secured” tweet. It’s just one of many times that Musk, who now controls Twitter, has gotten into trouble over a tweet.
According to reports, plaintiffs contended that Musk should be held to the same standards of financial responsibility as everyone else.
According to the Post, Musk’s attorney Andrew Spiro said during closing arguments, “Just because it’s a horrible tweet, doesn’t imply it’s fraud.”