Elon Musk triumphs, after he has won the recent court case against investor claims that he violated federal securities law. The jury rejected the claims and found that the investors failed to prove their case against Elon Musk and Tesla Inc.
This case is another example of Elon Musk‘s unusual appetite for seeing cases through to trial and his decision to participate in litigation has paid off in the past. A recent court case has ended with Elon Musk, CEO of Tesla Inc., winning against investor claims that he violated federal securities law. The jury rejected the claims that Elon Musk broke the law when he tweeted in 2018 about taking Tesla private. The investors failed to prove their case against Elon Musk and the electric-car company he runs.
The case originated from Elon Musk’s tweets more than four years ago proposing to take the company private. At the time, he was serving as both the chairman and CEO of Tesla. After these tweets, Elon Musk agreed to pay $20 million in 2018 to settle a securities-fraud charge brought by the Securities and Exchange Commission. However, he has criticized the SEC and this case was an opportunity for him to “clear the record”.
The investors sued Elon Musk, alleging that his tweets were false and that relying on them caused them to lose billions. During the trial, the lead plaintiff, Glen Littleton, testified that his belief Tesla would go private led him to liquidate certain positions. Elon Musk, on the other hand, told jurors that he was trying his best to keep shareholders informed and that he was confident that he had the funding to take Tesla private.
The jury was asked to decide whether Elon Musk’s tweets were material to investors and whether the misrepresentations caused investors to sustain losses. The jury foreperson, Robin Cadogan, said he wasn’t persuaded by the arguments that the tweets were material. Tesla board members sought to distance themselves from Elon Musk during the trial, stating that he was tweeting in his personal capacity. This argument was persuasive for Cadogan.
This case is another example of Elon Musk’s unusual appetite for seeing cases through to trial. From 1997 to 2021, only 0.2% of federal securities class-action cases were tried to a verdict. However, Elon Musk’s decision to participate in litigation rather than settle has paid off in the past. He took the stand in 2019 in a defamation case brought by a British spelunker and a Los Angeles jury sided with him. Elon Musk was also the lone Tesla board member to go to trial in a shareholder lawsuit over the company’s 2016 acquisition of home-solar company SolarCity. A judge ruled in his favor last year.