Court says Musk recklessly tweeted ‘funding secured’ for Tesla privatization

SAN FRANCISCO, May 10 (Reuters) – A court has ruled that Elon Musk’s 2018 tweets saying funding had been secured to take Tesla private were inaccurate and reckless, saying “there was nothing concrete” concerning the financing of the Saudi sovereign wealth fund at the time.

The ruling by U.S. District Judge Edward Chen of San Francisco is a major victory for investors alleging Musk inflated stock prices by making false and misleading claims, causing billions in damages.

In 2018, Musk met with officials from Saudi Arabia’s Public Investment Fund and had a discussion about privatizing Tesla, but evidence shows that “there was nothing concrete in the funding from the PIF. “wrote the judge.

Join now for FREE unlimited access to

“To the contrary, the discussions between Tesla and the PIF were clearly at the preliminary stage.

“No reasonable jury could conclude that Mr. Musk did not act recklessly given his clear knowledge of the discussions,” he said.

He said details such as the total amount of funding needed to take Tesla private or the price to pay for Tesla stock were not discussed.

The summary judgment, handed down on April 1, was sealed for more than a month before being made public on Tuesday.

“This is extremely important,” shareholder attorney Nicholas Porritt, a partner at Levi & Korsinsky LLP, told Reuters.

He said it’s about the class action plaintiffs getting summary judgment on falsity and science before heading to a jury trial, scheduled for January.

The remaining question is what damage the intentional misrepresentation caused to shareholders, he said.

The judge declined to grant shareholders summary judgment on whether the allegedly false statements actually impacted Tesla’s stock price.

Musk’s attorney, who filed motions to overturn the court’s decision, was not immediately available for comment. Musk recently said the funding was actually secured to take Tesla private in 2018.

The latest move was in line with a complaint from the US security regulator that sued Musk on tweet fraud charges in 2018. He settled with the US Securities and Exchange Commission, resigning as chairman of Tesla, paying fines and agreeing to get a lawyer approved. some of his tweets before posting them.

Join now for FREE unlimited access to

Reporting by Hyunjoo Jin; Editing by Stephen Coates

Our standards: The Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published.