Initiation of lawsuit over Tesla boss’s tweets

Posted on Wednesday, January 18, 2023 at 9:11 pm.

More than four years after he tweeted that he would take Tesla public, Elon Musk must answer in court by investors hurt by his statements after already incurring the wrath of the authorities.

“Elon Musk, who was (then) the CEO of Tesla, lied and his lies caused people to lose millions of dollars,” said Nicholas Porritt, an attorney for the plaintiffs.

On August 10, 2018, they filed a complaint against the business executive for “artificially manipulating Tesla’s stock price to the utter detriment of investors” who were betting on a price drop.

The fraud trial opened Tuesday in San Francisco with the selection of a nine-person jury and is expected to last three weeks. Elon Musk himself should probably take the stand as early as Friday.

He made a splash on August 7, 2018 by saying he wanted to delist his group for $420 a share.

He added that funding was “secured” to carry out the operation, and a few days later he said he was in talks with Saudi Arabia’s sovereign wealth fund in particular.

According to the defense, Elon Musk intended to delist Tesla and had no doubts about financing thanks to guarantees from this fund.

The billionaire’s lawyer, Alexander Spiro, admitted that his client wrote the tweet “in haste” after it was revealed in the Financial Times that a Saudi fund had invested in Tesla.

– “Joke” –

The choice of words was “reckless,” but “this is not fraud,” the lawyer rapped.

“During this whole process, Mr. Musk has not sold a single share. No Tesla executive, no member of the board has sold a single share. In real fraud cases, people have an agenda, they want to benefit. This shows that it is not a fraud.” – he added.

The electric car maker’s stock rose to $386.48 after the tweets. On August 16, it fell to $335.45.

On that date, the New York Times published an interview with Elon Musk that “confirmed the worst rumours,” Nicholas Porritt said, specifically that “no one on the board reread the tweets he wrote from his car.” airport and the price, $420, was a joke.

In the US, the numbers 4 and 20 together are associated with cannabis consumption. When the billionaire proposed to buy Twitter last spring, he chose a price of $54.20 per share.

“I can tell you this was no joke to Glen Littleton (the lead plaintiff, editor’s note) or the other investors who lost millions,” claimed Nicholas Porritt.

The lawyer explained to the jury that the case is important because it concerns the respect of laws governing the financial markets, among others, the markets that depend on the funds of pension and insurance companies.

– “Talented but forbidden” –

In addition to Elon Musk, Tesla as a legal entity and the members of the manufacturer’s board of directors at that time also participate in this procedure.

For four and a half years, Elon Musk never stops explaining himself in this famous tweet.

Tesla quickly abandoned the idea of ​​delisting, but the American stock market police, the SEC, filed a complaint, believing that the boss had not provided evidence of his financing.

The regulator ordered Elon Musk to step down as chairman of Tesla’s board of directors, pay a $20 million fine, and later required that his tweets directly related to Tesla’s business be pre-approved by an authorized lawyer.

But the government’s intervention has not dampened his appetite for provocation on Twitter, his beloved social network, which he purchased in October after months of detours.

Since then, his controversial decisions at the top of the platform have drawn outrage almost daily, so much so that his lawyers last week asked a California judge to move the trial to Texas, fearing jury bias.

The motion was denied, but comments from potential jurors read in court Tuesday revealed just how divisive the multibillionaire is.

Some described him as a “successful pioneer”, others as “arrogant, unpredictable and sometimes irrational” or “talented but crazy”.

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