Tesla CEO Elon Musk was recently sued by Tesla investors for financial damages resulting from his 2018 scandal. “funding secured”Tweets about the decision to make the company public.
It Wall Street Journal reports that Tesla CEO Elon Musk recently won a significant legal battle over infamous tweets he made in 2018 about having “funding secured”Tesla to be taken private. The jury dismissed investor claims that tweets violated federal securities law. Plaintiffs couldn’t prove that tweets caused any damage.
Musk posted in August 2018, that he considered going private with Tesla, and that he believed he did. “funding secured”For the transaction. The deal never happened, despite the tweets’ huge impact on the financial community. Musk was charged by the Securities and Exchange Commission with securities fraud. The tweets led to him being fined $20 million. Musk however saw the investor lawsuit as an opportunity for him to get his act together.
Glen Littleton was the plaintiff in the case. He claimed that tweets had threatened his life because he had to sell some of his investments. Musk, on the other hand, claimed that he knew he could take Tesla private. He also stated that his goal was updating shareholders. “I was trying my best to keep shareholders informed and ensure that all shareholders had the same information,”Musk spoke to jurors. Musk also stated that although he and Saudi Arabian investors didn’t discuss any price, he said that he believed that the country was willing to help with privatization.
It was rare for a case to go to trial. Cornerstone Research estimates that less than 0.2 per cent of federal securities class actions cases, except those involving mergers/acquisitions, went to trial between 1997 and 2001. In about half the cases that reached this stage, both plaintiffs and defendants prevailed. Joseph Grundfest, a former SEC Commissioner and Stanford Law School Professor said these cases settle often because they are so likely to lose at trial.
A previous ruling of U.S. district Judge Edward Chen found that the CEO had acted recklessly when making statements about potential privatization. The jury had to decide whether tweets affected or caused losses and whether investors were materially adversely affected. In the end, the jury dismissed the investors’ claims and found in favor of Musk.
Breitbart news reporter Lucas Nolan reports on issues such as free speech and onlinecensorship. Follow him on Twitter @LucasNolan
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