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Elon Musk found not guilty of fraud over Tesla tweet in 2018

4 February 2023
2 min.
Elon Musk found not guilty of fraud over Tesla tweet in 2018

Musk not guilty

A jury in a California state court has found Elon Musk not guilty in a lawsuit brought by shareholders of the company he heads, Tesla. This was reported by CNN.

The lawsuit is based on a Twitter post by Musk, dated August 2018, in which he said he was considering a $420-a-share buyout of Tesla.

According to the plaintiffs, Musk's publication of the deal, which ultimately failed to materialise, caused first a spike and then a drop in the company's share price, which the victims said caused them to lose billions of dollars.

The plaintiffs sought compensation from Musk for the financial damage they believe was caused by the entrepreneur's record. The jury agreed that the businessman was not responsible for the investors' financial losses, stressing that the plaintiffs had not provided solid evidence for the allegations. "Thank God the wisdom of the people has prevailed," Musk said on Twitter, commenting on the court's decision.

Nicholas Porritt, a lawyer for Tesla shareholders, said: "Our society is based on rules. We need rules to save us from anarchy. The rules should apply to Elon Musk as they do to everyone else."

Mr Musk's lawyer Alex Spiro said: "Just because it's a bad tweet doesn't make it fraudulent."

After the verdict, Mr Porritt said: "We are disappointed with the verdict and are considering the next steps."

Several Tesla directors also gave evidence, including James Murdoch, Rupert Murdoch's son. They testified that Mr Musk did not need Tesla's board to review the ransomware tweets.

Securities fraud lawyer Reed R. Katherin called the Tesla shutdown tweet "as specific a statement about shutting down the company as possible" and said the acquittal was "a travesty of investors and securities laws".

The US SEC also sued Musk in 2018, accusing him of forgery and misleading shareholders with his Twitter postings. Under a pre-trial agreement between Tesla and the commission, reached in September that year, Musk was ordered to pay $20 million and step down as chairman of Tesla, while retaining his position as Chief Executive Officer of the company. The company itself was also ordered to pay 20 million dollars, in addition, it appointed two independent directors.

Persons6 and Companies4 in the news

Partner of Hagens Berman Sobel & Shapiro LLP
1 place
British-American businessman
2 place
3 place
attorney at Levi & Korsinsky
4 place
Founder of News Corp
5 place
CEO of Tesla
6 place
X (Twitter)
2 place
3 place
4 place
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JP Morgan Chase
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