A San Francisco federal jury has found Tesla CEO Elon Musk not liable for his unexpected tweet from 2018 in which the billionaire announced his intention to take the company private, clearing him of fraud allegations.
Musk was accused of defrauding the company’s investors when he tweeted about his plans to take Tesla private and having “funding secured” to do so. Musk is also the CEO of SpaceX and Twitter.
Musk thanked the jury and posted on Twitter following their decision, “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”.
The jury spent hours deliberating in court before concluding that neither Musk nor the Tesla board had committed fraud about the tweet.
The jury’s decision dismissed claims that Musk had broken the securities laws and rejected the demand for billions of dollars in damages against the Tesla CEO.
Plaintiffs argued that the tweet caused $12 billion in capital losses for Tesla shareholders.
On August 7, 2018, Musk tweeted: “At $420, I’m thinking about taking Tesla private. funding secured.”
In a separate case, investors are suing Tesla in Delaware over the CEO’s $55 billion compensation package. The Tesla CEO is still awaiting the court’s decision in that case.
For the shareholders who tried to recover trading losses from changes in Tesla shares after Musk posted the messages, the outcome is a painful loss. About two weeks after his initial tweet, Musk backed out of the take-private plan.
A particularly poignant vindication for Musk comes after the US Securities and Exchange Commission sued him and Tesla due to his tweets from August 2018 and after he reluctantly agreed to accept limitations on his social media posting.
