Elon Musk has been cleared in a lawsuit that accused him of misleading investors by claiming he had secured funding to privatize electric car company Tesla. On Friday, jurors decided he is not liable for investors’ losses and found him not guilty of the fraud charges slammed against him.
In a tweet made on Aug. 7, 2018, Musk said he had funding in place to take Tesla private. “Am considering taking Tesla private at $420. Funding secured,” he wrote.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Later in the day, he made another tweet that read, “investor support is confirmed.”
Following the tweets, Tesla’s shares surged. However, the proposed £60bn deal fell through and the stock price fell within a few days, causing investors to interpret his tweet as an effort to dupe investors who had placed bets against the company.
A class action lawsuit seeking billions of dollars in damages was filed against the entrepreneur as investors claimed the tweets guided their decisions to buy or sell their shares.
Plaintiffs argued that a short meeting with Yasir Al-Rumayyan, the governor of Saudi Arabia’s sovereign wealth fund, was not enough for Musk to conclude that he had funding for the deal.
“Apparently a $60 billion financing commitment was obtained and no one wrote down a single word,” attorney Nicholas Porritt said.
Taking the stand in his defense, Musk explained to jurors that his tweets were not some grand plot to defraud investors. While he admitted that the tweets were “technically” inaccurate, he said he believed he had a verbal commitment from Al-Rumayyan for the deal.
“He was trying to include the retail shareholder, the mom, and pop, the little guy, and not seize more power for himself,” defense attorney Alex Spiro said.
“I had no ill motive. My intent was to do the right thing for all shareholders,” Musk said.
After a nearly two-hour deliberation, jurors agreed that the tweets did not indicate that Musk committed fraud or planned the aftermath.
The verdict was a pleasant surprise for Musk, who has unsuccessfully tried to transfer the trial to Texas for fear of bias in Democrat-dominated California.
The Twitter CEO took to the social media platform to celebrate his victory. “Thank goodness, the wisdom of the people has prevailed,” he wrote.
“I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case,” the tweet read further.
Thank goodness, the wisdom of the people has prevailed!
I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.
— Elon Musk (@elonmusk) February 3, 2023