- A jury found that investors could not prove that Elon Musk had thrown them off course with his tweet that he had “secured the funding” to take Tesla private, according to the WSJ.
- The result confirmed Musk, who had argued that he didn’t think his tweet affected Tesla’s stock price.
- Tesla investors had claimed that his public statements resulted in billions of dollars in damages.
Elon Musk was reportedly acquitted late Friday when a federal jury found Tesla investors couldn’t prove he derailed them with a 2018 tweet he had “Financing secured” to take the electric car maker private, a deal that never materialized.
The nine-member jury came to the conclusion shortly after deliberations began, according to a report by The Wall Street Journal.
The verdict was the culmination of a civil trial in federal court in San Francisco where a jury heard testimony from high-profile witnesses including Musk himself, along with Tesla’s former CFO Deepak Ahuja and Musk’s former chief of staff Sam Teller.
Musk’s defense highlighted his July 2018 meeting with Yasir Al-Rumayyan, an official with the Private Investment Fund of Saudi Arabia, at which he said Al-Rumayyan pledged to help fund the deal. Those verbal assurances, in part, prompted him to tweet that he had “secured funding for a take-private deal for Tesla,” he told jurors last month.
Nicholas Porritt of Levi & Korsinsky LLP, an attorney for Tesla shareholders, had challenged that account. In his closing arguments Friday, Porritt told jurors that a funding conversation, which he estimated could total $60 billion, should at least have been put in writing, but Musk took no notes.
“Sometimes we replace what we wished for with what actually happened,” Porritt argued in court. “That can happen when you’re facing billions of dollars in government investigations and lawsuits.”
Musk’s tweet, which he posted in August 2018, read, “I’m considering privatizing Tesla for $420. Funding secured.”
In the closing arguments, Musk’s attorney, Alex Spiro of Quinn Emanuel Urquhart & Sullivan, argued that Musk’s opponents had portrayed him as a “fire-breathing dragon” and that the billionaire could not be accused of being a “bad tweeter.”
Before the trial, US District Judge Edward Chen ruled that the billionaire’s tweets should be considered “untrue” but that the jury must determine whether they were “material”. In securities jargon, this meant the judges had to consider whether Musk’s statements were significant enough to influence investors’ trading decisions.
Musk’s comments about the potential deal also caught the attention of securities regulators, who in September 2018 extorted a $40 million fine from Musk and the company, saying he could no longer run Tesla’s board of directors.
Porritt, the attorney for Tesla investors, had framed the case’s stakes in broad, existential terms, arguing that it boiled down to the question of whether ordinary investors could trust public markets.
“Whether it’s securities markets or football games, the rules must be fair and apply to everyone,” he said in court on Friday. “And in this case, the ultimate issue is whether the rules that apply to everyone else should apply to Elon Musk.”