Tesla shareholders fail in class action lawsuit against Elon Musk
Tweets by Elon Musk led to strong price fluctuations on the stock exchange in 2018. A court in San Francisco has now acquitted the Tesla boss of fraud allegations.
Was sued by investors, but now acquitted: Elon Musk leaves the court according to his testimony. (January 24, 2023)
Getty Images via AFP/Justin Sullivan
In the trial against Elon Musk for misleading tweets about the electric car manufacturer Tesla, the company boss has been acquitted of the allegation of fraud. After the decision of the jury on Friday in San Francisco, the controversial multi-billionaire said: “Thank God, the wisdom of the people has prevailed.” The process was about Musk’s Twitter statements in 2018, which had triggered strong price fluctuations on the stock exchange.
The process lasted a total of three weeks – in the end, the jury very quickly came to an agreement. After deliberating for only two hours, the jury found the defendant not guilty. Musk immediately praised the “wisdom of the people” and went on to say: “I am deeply grateful to the jury for unanimously recognizing my innocence.”
Musk backed down after the tweet
Musk announced on Twitter in August 2018 that he wanted to take Tesla private at a price of $420 per share. The funding for this is “secured”. The announcement caused Tesla shares to fluctuate, but Musk later backed down. It became clear that the financing was anything but secure.
Investors subsequently sued Musk. They accused the currently second richest person in the world of lying and “artificial manipulation” of the price of Tesla shares with the aim of harming all investors who had bet on a falling share price. Referring to Musk during the trial, one of the plaintiffs’ attorneys said, “Because of his lies, ordinary people have lost millions and millions of dollars.”
Musk was fined $20 million
The Tesla boss had always rejected the allegations of fraud. In his personal testimony in court, he argued that he had not written that the secured funding was “a fact”. He only expressed his personal thoughts. And he was convinced that the financing was secured at that moment.
The tweets about Tesla also got Musk into trouble with the US Securities and Exchange Commission. As part of an agreement, he had to give up the chairmanship of the Tesla board of directors, pay a fine of $20 million and have tweets about Tesla approved by a lawyer.
The trial came amid tumultuous times for Musk. Critics accuse the pugnacious entrepreneur of concentrating too much on the short message service Twitter, which he bought for 44 billion dollars at the end of October after a long takeover dispute, and of neglecting Tesla. However, the numbers at the electric car manufacturer seem to speak more for Musk: The group reported at the end of January that it had made record profits in 2022.
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