Tesla CEO Elon Musk and his security detail depart the corporate’s local office in Washington, January 27, 2023.
Jonathan Ernst | Reuters
Elon Musk and Tesla were found not liable by a jury in a San Francisco federal court on Friday in a class-action securities fraud trial stemming from tweets Musk made in 2018.
The Tesla, SpaceX and Twitter CEO was sued by Tesla shareholders over a series of tweets he wrote in August 2018 saying he had “funding secured” to take the automaker private for $420 per share, and that “investor support” for such a deal was “confirmed.”
Trading in Tesla was halted after his tweets, and its share price remained volatile for weeks.
Jurors deliberated for lower than two hours before reading their verdict. “We’re disenchanted with the decision and considering next steps,” said Nicholas Porritt, partner at Levi & Korsinsky, the firm representing the shareholders in the category motion, in an email to CNBC.
“I’m deeply appreciative of the jury’s unanimous finding,” Musk wrote on Twitter.
Musk’s lead counsel, Alex Spiro of Quinn Emanuel Urquhart & Sullivan, arguing before the jury earlier Friday, said the matter needed to be assessed in context, noting the Tesla CEO was only considering taking the corporate private. He said fraud can’t be built on the back of a consideration.
Spiro didn’t immediately reply to requests for comment.
The shareholders within the certified class-action lawsuit included a mixture of stock and options buyers who alleged that Musk’s tweets were reckless and false, and that counting on his statements to make decisions about when to purchase or sell cost them significant amounts of cash.
Musk later claimed that he had a verbal commitment from Saudi Arabia’s sovereign wealth fund, and that he thought funding would come through at his proposed price based on a handshake. Nonetheless, the deal never materialized.
Through the course of this trial, Musk also said he would have sold shares of SpaceX to finance a going-private deal for Tesla, in addition to taking funds from the Saudi Public Investment Fund.
