Jury rules in Musk’s favor in civil case brought by shareholders against Musk over his 2018 tweeted claim that he’d secured funding to take Tesla private .
Elon Musk celebrated Friday after a jury ruled in his favor in a civil case brought by Tesla shareholders over tweets in 2018 that he’d secured funding to take Tesla private.
The jury in a California court ruled unanimously that Musk hadn’t defrauded investors with his bogus claim, which sent shares of the electric vehicle maker soaring at the time, for a brief period.
A nine-member jury reached its verdict Friday afternoon, after two hours of deliberations.
The case centered on tweets Musk made in August 2018 about taking Tesla Inc. private including one claiming “funding secured.”
The trial lasted for three weeks.
In the aftermath, Musk paid a multi-million dollar penalty to the SEC and entered an agreement to have his tweets reviewed by Tesla management to settle regulator claims in the case.
However, investors appear to have struck out in their claims that Musk harmed them with his actions.
The heart of the case turned on whether Musk’s tweets were misleading enough to have violated securities laws.
Musk’s use of Twitter at the time forced regulators to reassess their approach to statements made on Twitter. In general, SEC guidelines require that information be released to all members of the investing community at the same time, and that the information be truthful. Twitter has since emerged as an important platform for corporate communications, and indeed one that Musk has since bought, largely with money he made from selling Tesla shares.
While the investors in Tesla at the time of the “funding secured” tweet claimed to have lost billions in the subsequent market turbulence, evidence suggests that if they had simply held on to their shares they would be a lot happier now. Tesla’s highest split adjusted price in Aug. 2018 was $25.30, It closed Friday at $189.98.
Analyst Dan Ives, a Tesla bull, welcomed the ruling.