HomeTech NewsTech GiantsFederal jury finds Musk not guilty of misleading Tesla shareholders

Federal jury finds Musk not guilty of misleading Tesla shareholders

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A federal jury in San Francisco (USA) declared this Friday the tycoon Elon Musk not responsible for the alleged million-dollar losses that several investors attributed to his 2018 tweets in which he said he had enough funds to take the electric vehicle manufacturer Tesla off the stock market, something that never happened.

The nine-person jury delivered the verdict in just two hours after retiring to deliberate this afternoon, after a civil trial that lasted three weeks and in which it was decided whether the magnate misled investors with his controversial messages on the social network Twitter, according to local media reports.

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This is a victory for Musk, who testified throughout the process to ensure that he did have enough capital to take the company public thanks to commitments from the Saudi sovereign wealth fund and his own participation in SpaceX, and also pointed out that he had no bad intentions towards investors.

“I am considering delisting Tesla at $420. Financing secured,” read the scrutinized tweet in the case, in which Musk referred to the price per share he could offer in the transaction and would have valued the company at about 72,000 million dollars. He then added another message saying: “Investor support is confirmed. The only reason this is not certain is that it depends on shareholder vote.”

Following the messages, Tesla’s share price rose sharply, then fell a few days later when the media began reporting that it did not actually have that funding secured.

Musk seemed to start at a disadvantage, since the judge, Edward Chen, had found that these statements were false and misleading, but the jury had to determine if it was those messages that affected Tesla’s price, the possible intention of the defendant and the cost they had for the plaintiffs.

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First, the jury had to decide whether the messages published by Musk misled investors and then calculate the economic impact they had, so that by rejecting that first assumption, the businessman is saved from having to pay millions of dollars in compensation to the plaintiffs.

According to The Wall Street Journal, the panel said the investors did not provide sufficient evidence to support their argument that Musk caused them harm by writing the tweets about the potential IPO. “The jury has understood the correct thing. That’s all I’m going to say,” commented Alex Spiro, one of the lawyers for Musk and Tesla (also accused) after the verdict was announced, while the investor defense said they were considering their next steps, according to local media.

The tweets already led the US Securities and Exchange Commission to accuse Musk of fraud in 2018 and the businessman accepted a fine of 20 million dollars as a sanction and leave for at least three years as president of the board of directors of the company, although he continued to be its CEO.

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