Elon Musk, Twitter’s new CEO was found not guilty by jurors and not liable for investors’ losses in a fraud trial over his 2018 tweets claiming that he had funding in place to take Tesla private.
Musk’s tweets sent the Tesla share price on a rollercoaster ride and was sued by stakeholders who said the SpaceX magnate acted irresponsibly in an effort to squash investors who had bet against the company.
Jurors verdict
Jurors pondered on the facts of the case for barely two hours before returning to the San Francisco courtroom and said that each one of the jurors totally agreed that neither Musk nor the Tesla board committed deception thru the tweets and in their outcomes.
“Thank goodness, the wisdom of the people has prevailed!” tweeted Musk, who had tried but failed to get the trial moved to Texas on the grounds that jurors in California would be biased against him.
“I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case,” Musk added.
Attorney Nicholas Porritt, who represents Glen Littleton and other investors in Tesla, argued in court that the case was about making sure the rich and powerful have to abide by the same stock market rules as everyone else.
“Elon Musk published tweets that were false with reckless disregard as to their truth,” Porritt told the panel of nine jurors during closing arguments.
Porritt pointed to expert testimony estimating that Musk’s claim about funding, which turned out not to be true, cost investors billions of dollars overall and that Musk and the Tesla board should be made to pay damages.
But Musk’s lawyer Alex Spiro effectively countered that the billionaire may have erred in his choice of words during a hasty tweet, but that he did not set out to deceive anyone.
Spiro also depicted the unpredictable entrepreneur, as having had a troubled childhood and having come to the United States as a poor youth chasing dreams.
Musk testified during three days on the witness stand that his 2018 tweet about taking Tesla private at $420 a share was no joke and that Saudi Arabia’s sovereign wealth fund was serious about helping him do it.
“To Elon Musk, if he believes it or even just thinks about it then it’s true no matter how objectively false or exaggerated it may be,” Porritt told jurors.
Porritt added that Tesla and its board were also to blame because they allowed Musk to use his Twitter account to post news about the company.
How it began
The case was about a pair of tweets in which Musk said “funding secured” for a project to buy out the publicly traded electric automaker, then in a second tweet added that “investor support is confirmed.”
“He wrote two words funding secured that were technically inaccurate,” Spiro said of Musk while addressing jurors.
‘Whatever you think of him, this isn’t a bad tweeter trial, it’s a ‘did they prove this man committed fraud?’ trial.’
Musk did not intend to deceive anyone with the tweets and had the connections and wealth to take Tesla private, Spiro claimed.
During the trial playing out in federal court in San Francisco, Spiro said that even though the tweets may have been a ‘reckless choice of words,’ they were not a fraud.
“I’m being accused of fraud; it’s outrageous,” Musk said while testifying in person.
Musk said he fired off the tweets at issue after learning of a Financial Times story about a Saudi Arabian investment fund wanting to acquire a stake in Tesla.
The trial came at a delicate period for Musk, who has dominated the headlines for his messy “coup” of Twitter where he fired over 7,500 workers and scaled-down content moderation.
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