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San Francisco (AFP) – Elon Musk was found not guilty of fraud Friday by a California jury in a trial over tweets he posted in 2018 saying he was going to take his company Tesla off the stock market.
Those tweets sent the firm’s share price on a rollercoaster ride, and Musk was sued by shareholders who said he acted recklessly in an effort to squeeze investors who had bet against Tesla.
Jurors quickly reached a verdict Friday after a three-week trial sparked by that lawsuit.
They deliberated for just two hours before returning to the San Francisco courtroom to say they unanimously agreed that neither Musk nor the Tesla board perpetrated a fraud with the tweets and the aftermath.
“Thank God, the wisdom of the people has prevailed!” tweeted Musk, who had tried but failed to get the trial moved to Texas because juries in California would be biased against him.
“I am deeply grateful that the jury unanimously found me not guilty in the Tesla 420 private taking case.”
Attorney Nicholas Porritt, who represents Glen Littleton and other investors in Tesla, had said in closing arguments that “ultimately, it’s a question of whether the rules that apply to everyone else should also apply to Elon Musk.”
“Elon Musk posted tweets that were false with reckless disregard for their truth,” he added.
Porritt pointed to expert testimony who estimated that Musk’s claim about the funding, which turned out to be untrue, cost investors billions of dollars in total and that Musk and the Tesla board should be required to pay damages. .
But Musk’s lawyer, Alex Spiro, successfully argued in court that the billionaire may have made a typo in a hasty tweet, but was not out to mislead anyone.
Spiro also described the now owner of Twitter as someone who had a troubled childhood and came to the United States as a poor young man chasing dreams.
“Irresponsible”
Musk stunned markets on August 7, 2018, by saying on Twitter that he wanted to take his auto company public at a price of $420 per share, up 23% from the previous day’s close, and then by assuring that the financing was “secure”.
Shares soared, rising 11% that day, before falling in the days that followed.
Investors who were betting on a decline in the share price, known as “short sellers,” believed that Musk had violated securities laws by submitting false information that had driven up the share price, and demanded compensation.
The judge in the case, Edward Chen, had already concluded that the tweets were indeed misleading and that the businessman had acted “irresponsibly.”
Jurors had to decide whether the tweets fraudulently inflated the stock, and if so, to what extent this might have affected the plaintiffs.
They also had to decide whether Tesla’s board members could be held liable. By answering the first few questions in the negative, they quickly exonerated Musk and Tesla.
On the stand at the start of the trial, the billionaire had claimed he had “never” tried to mislead investors.
He really thought he had access to sufficient funding, even if it meant selling shares in his other company SpaceX, he said, while acknowledging that he had no firm partner commitments.
with AFP
