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Jury find Musk, Tesla not liable in securities fraud trial following ‘funding secured’ tweets

Tesla CEO Elon Musk and his bodyguard leave the corporate’s local office in Washington, D.C., January 27, 2023.

Jonathan Ernst | Reuters

Elon Musk and Tesla were found irresponsible by a jury in a San Francisco federal court on Friday in a securities fraud class motion lawsuit stemming from Tweets posted by Musk in 2018.

The jurors deliberated for lower than two hours before reading the decision.

The Teslathe CEO of SpaceX and Twitter, was sued by Tesla shareholders over a series of tweets he wrote in August 2018 saying he had “secured funds” to take over the private automaker for $420 a share, and that “investor support” for such a deal, it was “confirmed.” Tesla trading was halted after his tweets, and the stock price remained volatile for weeks.

“In this rush, he doesn’t think ahead of time that it may very well be interpreted in a different way and what which means to him,” Musk’s lawyer told the jury earlier on Friday. “At that moment, he didn’t think, ‘how can my words be interpreted in a different way by you than they’re by me.’

“You’ve got to place that in context – he’s considering keeping it private, and the problem is whether or not he’ll actually move it forward,” Musk’s attorney said. “No deception has ever been built on consideration.”

Shareholder attorneys and Musk’s chief counsel didn’t immediately reply to requests for comment.

The shareholders within the certified class motion are a combination of stock and options buyers who say Musk’s tweets were reckless and false and price them significant amounts of cash to depend on his statements to make your mind up when to purchase or sell.

Musk later claimed he had a verbal commitment from Saudi Arabia’s sovereign wealth fund and believed the financing would go ahead at its proposed price based on a handshake. However, the deal never materialized.

In the method, Musk also said he would sell SpaceX shares to fund a non-public deal for Tesla, and would also take funds from the Saudi PIF.

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