After only an hour of deliberations, a jury found Tesla founder and CEO Elon Musk is “not liable” for securities fraud. The 3-week trial, also known as the Tesla 420 trial, saw many witnesses take the stand, including Musk.
The jury decision means Musk will not have to pay out billions of dollars in damages.
The trial results from a class action lawsuit brought by Tesla investors who owned stock over a 10-day period (August 7th–17th) in 2018.
The investors claimed Musk caused them to incur big losses and accused him of fraud based on his tweets in August 2018.
The billionaire tweeted about wanting to take Tesla private and claimed: “funding secured.”
Thank goodness, the wisdom of the people has prevailed!
I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.
— Elon Musk (@elonmusk) February 3, 2023
Before any witnesses were called District Court Judge Edward Chen had already instructed the jury to consider Musk’s tweet false. So, they only had to decide whether Musk intentionally deceived shareholders, causing them a loss.
With the billionaire in attendance, the jury heard closing arguments from Nicholas Porritt an attorney representing the Tesla investors.
420 Trial based on 2-word tweet
“Elon Musk published tweets that were false, with reckless disregard for the truth,” Porritt said.
“And those tweets caused investors harm, lots of harm. That is all that is necessary to find liability here.”
Musk had testified earlier that he thought he could get the Saudi money. Even without it, he believed he could take Tesla private with his own wealth. And he would have put have been willing to put in his stake in SpaceX, to fund the deal.
“I think I heard [Porritt] say that you should assume Elon Musk committed fraud. Well, he didn’t. Not even close,” Musk’s attorney said.
“Elon Musk was considering taking Tesla private, and he could have. Funding was not an issue, that is the fundamental truth, which will never change.”
“Stocks move all the time for lots of reasons,” Spiro argued. “They want to punish Musk for using two words, but they move all the time.”
Life goes on for the busy billionaire
It was reported that before the jury came back with the verdict, Musk wasn’t concerned about the case, because he was tweeting about Twitter.
Besides running Tesla, SpaceX, and now Twitter, Elon Musk also filed in June 2022 appealing the “forced settlement” in his case against the SEC. Musk had agreed to pay a $40 million settlement to the SEC over the 2018 disputed Tweets.
He was also forced to step down as chair of the company but did not admit to any wrongdoing.
