The jury finds in favor of Musk in the civil case brought by shareholders against Musk for his tweeted claim in 2018 that he had obtained funds to take Tesla private.
Elon Musk celebrated Friday after a jury found in his favor in a civil case brought by Tesla shareholders over tweets in 2018 that he had obtained funds to take Tesla private.
A jury in a California court ruled unanimously that Musk had not defrauded investors with his false claim, sending shares of the electric vehicle maker soaring at the time, for a brief period.
A nine-member jury reached its verdict on Friday afternoon after two hours of deliberations.
The case centered on tweets Musk made in August 2018 about taking Tesla Inc. private, including one that claimed “funds secured.”
The trial lasted three weeks.
Musk subsequently paid a multimillion-dollar fine to the SEC and reached an agreement for Tesla management to review his tweets to resolve the regulator’s claims in the case.
However, investors appear to have rejected his claims that Musk wronged them with his actions.
At the heart of the case was whether Musk’s tweets were misleading enough to have violated securities laws.
Musk’s use of Twitter at the time forced regulators to reevaluate their approach to statements made on Twitter. In general, SEC guidelines require that information be disclosed to all members of the investment community at the same time and that the information be truthful. Since then, Twitter has become a major platform for corporate communications, and indeed Musk has bought ever since, largely with money he made selling Tesla stock.
While investors in Tesla at the time of the “funding secured” tweet claimed to have lost billions in the subsequent market turmoil, the evidence suggests that if they had simply held on to their shares, they would now be much happier. Tesla’s highest split adjusted price for August 2018 was $25.30, it closed Friday at $189.98.
Analyst Dan Ives, a Tesla bull, welcomed the ruling.
