Elon Musk Vindicated by Jury in 2018 Securities Fraud Trial Over Tweets
R Tamara de Silva
Earlier this afternoon a federal jury in California took just two hours after a three week long trial to find the CEO of Tesla, Elon Musk not guilty of committing securities fraud over a series of tweets.
Elon Musk is not like most CEOs in that he is active participant in Twitter, even before acquiring it. His regular tweets include musing over business matters, political views and his views on his companies.
A 2018 complaint charged him with securities fraud over a series of tweets claiming shareholder losses in excess of $12 billion in losses.
On August 2018 Elon Musk announced that he was planning to take Tesla Inc. (TSLA.O) private at $420 a share-and had the "funding secured." He then tweeted that he had secured the funding. It turned out that the funding was not absolutely secured and the deal fell through.
After the initial tweets, the value of Tesla shares surged over a period of several days before falling after the discovery that the deal to take Tesla private would not happen. The issue at trial was whether Mr. Musk lied to the public about the matter thereby committing securities fraud.
Elon Musk took the stand to state that he had no ill motive and his intentions were to do the right thing for all Tesla shareholders.
During closing arguments, the plaintiffs' lawyer said the matter boiled down to whether the rules apply to everyone or whether Elon Musk can do whatever he wants without being held accountable. The jury believed Mr. Musk.
R Tamara de Silva