In His Trial, Elon Musk Was Declared Not Guilty Of Tweeting About Taking Tesla Private

In His Trial, Elon Musk Was Declared Not Guilty Of Tweeting About Taking Tesla Private:

A jury dismissed investor charges that Elon Musk broke federal disclosure rules when he tweeted in 2018 about possibly bringing Tesla Inc. TSLA 0.91% increase green up pointing triangles private, delivering the billionaire CEO a big victory.

After Two Hours Of Discussion Jury Found That The Investors Failed To Substantiate Their Claims:

After approximately two hours of discussion, the nine-person jury found that the investors who launched the class-action lawsuit failed to substantiate their claims against Mr. Musk or the electric-car firm he oversees.

The trial pitted Tesla shareholders involved in a class-action case against Musk, who is CEO both the electric carmaker and also the Twitter service he just purchased for $44 billion.

Nicholas Porritt Was Disappointed & Said That He Is Exploring Future Moves:

Nicholas Porritt, an attorney representing the investors, expressed disappointment with the verdict and said that he is exploring future moves. The principal plaintiff, Glen Littleton, refused to comment.

Tesla CEO’s Tweets Proposing To Take The Firm Private:

The issue originates from the Tesla CEO’s tweets proposing to take the firm private more than 4 years ago. “I’m thinking about taking Tesla private around $420. “Funding secured,” Mr. Musk, who was also Tesla’s chairman and CEO at the time, tweeted on August 7, 2018. “Investor support is assured,” he subsequently said. The only reason this is not clear is because it is up to a shareholder vote.”

Musk tweeted in 2018 that he had secured finance to take Tesla private, despite the fact that he had not received a firm commitment for an aborted transaction that would cost $20 billion to $70 billion to complete.

At the trial, Musk’s character was at issue, as was a portion of his income, which has placed him as one of the world’s wealthiest individuals. If the jury held him guilty for the 2018 tweets, which had already been judged fraudulent by the judge presiding over the trial, he could have been hit with a bill for billions of dollars in damages.

Mr. Musk Has Agreed To Pay $20 Million in 2018:

That incident has loomed over Mr. Musk, who has agreed to pay $20 million in 2018 to resolve a Securities and Exchange Commission penalty stemming from the same tweets. In the years following, he has criticized the SEC, claiming that he was pushed to pay and that doing so made him seem guilty. In a deposition, he said that this lawsuit was a chance to “clean the record.”

Musk sat stoically in trial earlier Friday, when he was simultaneously condemned as a wealthy narcissist whose irresponsible behavior threatens “anarchy” and praised as a visionary watching out for the “little man” in final statements.

“This posed a danger to my livelihood,” Mr. Littleton said at the trial, explaining that his assumption that Tesla will go private caused him to liquidate some investments.

Musk stated in his first tweet, shortly before boarding his private plane, that he had “financing secured” to taking Tesla private. Musk followed up with another tweet implying that the transaction was near.

Twitter’s stock to jump over the 10-day period covered by the case before dropping:

According to testimony produced during the three-week trial, the tweets led Twitter’s stock to jump over the 10-day period covered by the case before dropping back when Musk abandoned a transaction in which he never had a clear finance commitment.

Mr. Musk, who testified for 3 days, said he was convinced he had the funds to take Tesla privately and also that he tweeted to enlighten, not deceive, shareholders.

Musk’s choice to attend the final arguments, despite the fact that his attendance was not needed, demonstrated how important the trial’s result was to him.

A lawyer representing Tesla shareholders, Nicholas Porritt, asked the jury to chastise Musk for his “bad connection with the truth.”

“I was doing all I could to keep stakeholders informed and guarantee that everyone had the same knowledge,” Mr. Musk told jurors.

The Tesla CEO said that he was certain that Saudi Arabia’s sovereign-wealth fund, the Public Investment Fund, was willing to assist in taking the firm private, but he and the PIF did not discuss a precise price. Mr. Musk said that he had other options for financing the acquisition, such as using his share in rocket business SpaceX or enlisting the help of other investors.

Our Civilization Is Founded On Rules Porritt Said:

“Our civilization is founded on rules,” Porritt said. “We need regulations to prevent chaos. Elon Musk should be subject to the same rules as everyone else.” Musk’s attorney, Alex Spiro, said the 2018 tweets were “technically wrong.” “Just because it’s a terrible tweet doesn’t make it a fraud,” he told the jury.

The trial was presided over by U.S. District Judge Edward Chen, who concluded last year that Musk’s 2018 tweets were fraudulent and told the jury to regard them as such.

Elon Had Secured Financing From Saudi Arabia’s Public Investment Fund:

Earlier in the trial, Musk testified for almost eight hours that he thought he had secured financing from Saudi Arabia’s Public Investment Fund to take Tesla privatized after 8 years as a publicly traded business. He justified his original August 2018 tweet as well intention and geared at informing all Tesla investors that the manufacturer was perhaps on its way out as a publicly traded corporation.

By the time the case got to trial, U.S. District Judge Edward Chen already had determined that certain of Mr. Musk’s claims about possibly taking the firm private were false and that the CEO had behaved recklessly in making them.

“My Intention Was To Do What Was Right For All Stockholders.”, Elon Musk:

Jurors were supposed to evaluate whether Mr. Musk’s tweets were relevant to investors or whether the misrepresentations led investors to suffer losses, among other things. “I had no malicious intent,” Musk said. “My intention was to do what was right for all stockholders.” In his final argument, Spiro returned to that issue.

“He was attempting to involve the retail investor, the family run, the small person,” Spiro said.

The jury foreperson, Robin Cadogan, said he wasn’t convinced by claims that the tweets were relevant. “The whole message simply didn’t hit,” he said after the decision was announced. “There was nothing to offer me a “aha” moment.”

Tesla Board Members Tried To Separate Themselves From Mr. Musk:

Throughout the trial, Tesla board members tried to separate themselves from Mr. Musk, claiming that he was tweeting in his personal role. Mr. Cadogan, a 47-year-old from Santa Rosa, Calif., found his reasoning convincing.

This case exemplifies Mr. Musk’s extraordinary desire to see matters through to trial. According to Cornerstone Research, from 1997 to 2021, fewer than 0.2% of federal securities class-action actions, excluding those involving mergers or acquisitions, were attempt to verdict.

It’s not the first time Mr. Musk’s resolve to fight rather than compromise has paid off. He testified in a defamation action filed by a British spelunker whom he had referred to on Twitter as “pedo man” in 2019. A jury in Los Angeles found that Mr. Musk’s allegation that the spelunker was a paedophile did not constitute slander.

Mr. Musk was the only Tesla board member to face a shareholder lawsuit in 2021 over the firm’s 2016 purchase of home-solar business Solar-city. Others who were on the board during the time of the merger reached an agreement. Last year, a court decided in favor of Mr. Musk, saying that Tesla paid an affordable price and that the board properly evaluated the acquisition.

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