SAN FRANCISCO – Jurors on Friday rejected investor claims that Elon Musk violated federal securities law when he tweeted about potentially taking Tesla private.
The tweets sent the Tesla share price on a rollercoaster ride and Mr Musk was sued by shareholders who said the tycoon acted recklessly in an effort to squeeze investors who had bet against the company.
“Ultimately, it’s about whether rules that apply to everyone else should also apply to Elon Musk,” attorney Nicholas Porritt, who represents Glen Littleton and other investors in the automaker, had told the nine jurors during closing arguments.
“Elon Musk published tweets that were false with reckless disregard as to their truth.”
Mr Porritt had pointed to expert testimony estimating that Mr Musk’s claim about funding, which turned out not to be true, cost investors billions of dollars overall and that Mr Musk and the Tesla board should be made to pay damages.
Mr Musk testified during the trial that his 2018 tweet about taking Tesla private at US$420 (S$556) 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,” Mr Porritt told jurors.
Tesla and its board were also to blame, because they let Mr Musk use his Twitter account to post news about the company, Mr Porritt argued.
The case revolved around a pair of tweets in which Mr 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,” Mr Musk’s attorney Alex Spiro said of his client 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.”
Mr Musk did not intend to deceive anyone with the tweets, and had the connections and wealth to take Tesla private, Mr Spiro contended.
During the trial playing out in federal court in San Francisco, Mr Spiro said that even though the tweets may have been a “reckless choice of words”, they were not fraud.
“I’m being accused of fraud; it’s outrageous,” Mr Musk had said while testifying.
Mr 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 sensitive time for Mr Musk.
He has dominated the headlines for his chaotic takeover of Twitter.
The entrepreneur has laid off more than half of the 7,500 employees and downsized content moderation. AFP
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