Photo: Elon Musk
A nine-person jury in Northern California on Friday found Elon Musk not guilty of fraud in a trial over his 2018 tweets about having “funding secured” to take Tesla private (via NBC News). The Tesla CEO was being sued for allegedly costing shareholders millions of dollars due to the share price fluctuations that came after his online statements.
“I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case,” Musk said in a Friday tweet, thanking the jury for clearing him.
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
“I had no ill motive,” Musk said in nearly eight hours of testimony last month. “My intent was to do the right thing for all shareholders.”
Musk defended his tweets, testifying before the court that he believed he had a handshake agreement with Saudi Arabia’s Public Investment Fund for financing to take Tesla private at the time. He said that the Saudi sovereign wealth fund later pulled out of the deal.
Nicholas Porritt, an attorney representing the Tesla shareholders who brought the case, refuted Musk’s testimony and said that no formal agreement was ever in place between the eccentric entrepreneur and the Saudis.
Porritt went on to argue that the “funding secured” tweet served Musk’s own interests rather than those of investors. He said the consequent fluctuations in Tesla’s share price cost shareholders millions and potentially billions of dollars.
Musk, along with several colleagues, however, testified that the billionaire could have easily raised the funds to take Tesla private if necessary. For one, he could have sold his stake in rocketry giant SpaceX as a potential alternative to the Saudi funding. Instead, he consulted with shareholders and decided to ditch the plans about three weeks after his original tweet.
Musk’s acquittal comes in spite of his tweets being deemed “false and misleading” by a U.S. court in April 2022.
Shortly after the 2018 tweets, Musk reached a settlement with the U.S. Securities and Exchange Commission (SEC) wherein both he and Tesla agreed to pay $20 million USD each, and the CEO also acquiesced to oversight of his online activity. The jury in the San Francisco trial was instructed to disregard the SEC settlement in formulating its verdict.
Prior to the trial, the Musk side had unsuccessfully petitioned to move the trial from San Francisco to Texas over concerns that potential jury members in California may have been biased by negative press surrounding the Tesla CEO’s use and recent takeover of Twitter.
