Elon Musk Trial Over Tesla Tweets Heads to Closing Statements
Jurors in the federal trial over
2018 tweets proposing to take
private are poised to hear closing statements before deliberating on a verdict.
Investors have alleged that the Tesla chief executive violated federal securities law by making false statements about a possible deal and its financing, costing them billions.
“Am considering taking Tesla private at $420. Funding secured,” Mr. Musk, then also serving as Tesla’s chairman, tweeted on Aug. 7, 2018. He later added, “Investor support is confirmed.”
Tesla’s stock closed up 11% that day before giving back those gains and falling further.
Mr. Musk, who testified over three days in San Francisco, said he tweeted to inform rather than mislead shareholders. He said he thought he had access to sufficient funding to take the car company private.
The Tesla chief executive had met with Saudi Arabia’s sovereign-wealth fund, the PIF, a week before tweeting about a possible deal. He testified that he was certain the sovereign-wealth fund was prepared to help take the company private, though the two sides didn’t discuss a price for doing so or have a written agreement.
U.S. District Judge
who presided over the three-week trial of the class-action case, already ruled that some of Mr. Musk’s statements were untrue and that he acted recklessly in making them.
Jurors are being asked to decide, among other issues, whether Mr. Musk’s tweets were material to investors and whether the misrepresentations caused investors to sustain losses. Jurors also are poised to weigh whether Tesla and members of its board at the time should be held liable for Mr. Musk’s actions.
Board members sought to distance themselves from Mr. Musk, saying that he was tweeting in his personal capacity. As a result, Tesla’s rules governing information disclosure didn’t apply,
who now chairs the company’s board, testified last week.
“The tweets around August 7 were not subject to these policies because they were in his personal capacity as bidder,” Ms. Denholm said, adding that she acted in good faith throughout the process. “If I believed Elon was trying to mislead the public, I would have stood down from the board.”
Write to Rebecca Elliott at [email protected]
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