The billionaire was found not liable in a lawsuit brought by investors over a 2018 tweet claiming he secured funding to take Tesla private
A San Francisco jury deliberated for less than two hours before finding Tesla billionaire Elon Musk not liable in a class action securities fraud lawsuit bought by investors of the car company, CNBC reported. The trial stemmed from a 2018 tweet in which Musk claimed he had “funding secured” to take Tesla private. The tweet caused a massive volatility in Tesla’s stock value, which the plaintiffs claimed caused them financial harm.
Musk’s attorneys argued that the then-billionaire had intended to take the company private, and secured a “verbal commitment” from Saudi Arabia’s sovereign wealth fund that never came to fruition. Attorneys told the jury that “no fraud has ever been built on the back of a consideration,” and that Musk didn’t “think ahead of time in that rushed moment that this could be interpreted differently” from what the statement meant to him.
The fallout of the tweet did have repercussions for Musk. Tesla and Musk were fined a total of $40 million by the Securities and Exchange Commission, and he was forced to resign as chairman of the company for a period of three years.
Despite the SEC penalizing Musk for what they deemed reckless online behavior that affected investors, the billionaire has emerged victorious from the class action suit against him. “This case is about whether rules that apply to everybody else should apply to Elon Musk,” an attorney for the plaintiffs said during closing arguments. The attorneys told CNBC that they were “disappointed with the verdict,” and are “considering next steps.”
Musk’s dictation of company policy via tweet, as well as his fast and loose management style, has once again come into focus with his purchase of Twitter in October of last year. Former Twitter shareholders have filed a class action lawsuit against Musk alleging that he moved to intentionally suppress the company’s stock value while negotiating the purchase. Tesla is also being sued by employees alleging racial discrimination, and multiple sexual harassment lawsuits.
While Musk may have gotten one legal battle off his plate, there are many more to come.
