A jury in San Francisco has just cleared Tesla CEO, Elon Musk, of any wrongdoing in a class action trial over his tweets regarding the privatization of Tesla in 2018. The jury rejected allegations that Elon Musk violated securities laws and caused billions of dollars in damages to investors.
The trial centered around the claim that investors lost billions of dollars because they believed Elon Musk’s statements on social media, in which he claimed that he would take Tesla private at $420 a share and had funding arranged.
During the trial, Elon Musk’s attorney acknowledged that the tweets from 2018 were technically inaccurate, but argued that just because it was a bad tweet, it didn’t make it a fraud. The nine-member jury ultimately found Elon Musk not liable for securities fraud. Following the verdict, Elon Musk tweeted, “The wisdom of the people has prevailed. I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla ‘Go Private’ case.”
In 2018, Elon Musk paid a $40 million fine and had to resign as chairman to settle with the federal securities regulatory agency over essentially the same matter. The verdict was a big legal victory for Elon Musk, who had requested the trial to be moved out of San Francisco, claiming that he wouldn’t be able to receive a fair trial in the city due to his history of using Twitter.
The verdict may not be a surprise in the context of Tesla, as the stock reacts to sentiment and big plans, even if the funding is not secured. The jury’s decision may have hinged on Elon Musk’s testimony, in which he claimed that he didn’t intend to mislead anyone. The jury was instructed that recklessness is enough for liability and if they followed these instructions, their verdict was likely based on the idea that Tesla investors didn’t see much of a difference between funding being secured and a handshake deal.
