A jury has found Elon Musk not guilty within the case of his tweet about taking Tesla private at $420 a share.
Five years later, this single tweet remains to be haunting the Tesla CEO.
For many who don’t remember the situation, back in 2018, Musk briefly considered attempting to bring Tesla private and disclosed his intentions to investors through an easy tweet.
The Security and Exchange Commission (SEC) ruled that Musk exaggerated and misled shareholders when saying that the funding was “secured” within the tweet:
Musk went on a campaign against the SEC, calling them names and claiming that they were working for people shorting the electrical automaker. But ultimately, Tesla and Musk ended up reaching a settlement with the SEC.
As a part of the settlement, Musk agreed to step down from the role of chairman of the board, and Tesla and Musk needed to each pay $20 million in fines.
The CEO presumably didn’t want Tesla to must pay for his issue with the SEC. While he couldn’t directly pay for Tesla’s a part of the high quality, he decided to buy $20 million price of shares from Tesla. That way, he kind of not directly ended up paying for Tesla’s high quality – though he also ended up with ~71,000 additional Tesla shares in the method.
As we previously reported, Musk ended up actually getting cash from the settlement because of Tesla’s stock price surging.
One other a part of the settlement was that Musk and Tesla needed to agree for the previous to have his tweets reviewed by the latter’s legal department in the event that they are material to the corporate.
Musk has consistently denied any wrongdoings and claimed he settled with the SEC under pressure from Tesla investors.
Individually, Tesla investors have sued Musk personally over the tweet, claiming that they were defrauded of tens of millions of dollars as Musk exaggerated the claim that funding was secured.
The case was ongoing for years, but it surely was finally heard by a jury in northern California last week.
Today, the jury released its verdict – finding Musk not accountable for the investors’ losses.
Musk commented on the decision:
Thank goodness, the wisdom of the people has prevailed! I’m deeply appreciative of the jury’s unanimous finding of innocence within the Tesla 420 take-private case.
That’s probably the top of this saga – though Musk remains to be fighting a number of the elements of his settlement with the SEC, primarily the necessity to review his tweets which might be material to Tesla’s stock.
That’s probably the best thing.
As we previously reported, all of the evidence pointed to Musk being a bit too excited and jumping the gun with the tweet.
For him to be found liable, they might must prove that he was intentionally planning to defraud investors, and that’s a tall task.
He definitely ought to be more cautious about tweeting things like that when no deal has been signed, but I don’t think it’s fraud.
Nevertheless, you’d hope that he would have change into more cautious about his tweeting after this complete saga, but we haven’t seen much evidence of that either.