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 February 5, 2023

Jury rules in favor of Elon Musk in Tesla fraud case

CNBC reports that the jury has rendered a verdict in the Elon Musk Tesla fraud case, and the verdict is in favor of Musk. 

The case stemmed from a tweet that Musk - the CEO of Tesla, SpaceX, and Twitter - made back on August 7, 2018. The tweet had to do with turning Tesla into a private company.

Musk wrote that he is "considering taking Tesla private at $420. Funding secured."

After the tweet, trading in Tesla stock was halted. And, Tesla's share price would remain volatile for a number of weeks.

The biggest problem for Musk, however, is that the tweet resulted in a class action lawsuit being filed against him by shareholders.

The shareholders, according to CNBC, argued that "Musk’s tweets were reckless and false, and that relying on his statements to make decisions about when to buy or sell cost them significant amounts of money." In fact, the shareholders alleged that, combined, they lost billions of dollars because of Musk's tweet.

Musk, since the 2018 tweet, has claimed, according to Axios, "that he believed Saudi Arabia's sovereign wealth fund had committed to back the effort, and that more broadly securing capital wouldn't be a barrier in any case."

Musk, in addition to this, has said that he was willing to sell shares of SpaceX in order to fund the deal to make Tesla private.

Still, the class action lawsuit against Musk continued until this past Friday.

Before the verdict was rendered, Musk's chief attorney - Alex Spiro of Quinn Emanuel Urquhart & Sullivan - argued that the keyword used by Musk is "considering," and that fraud cannot be based on a person saying that they are "considering" doing something.

Whether or not that is true, legally speaking, is unclear. But, it was enough for the jury, which - in under two hours - reached a unanimous verdict in favor of Musk.

It was clear that this was a big relief to Musk. And, that's because Musk had previously tried to get the case moved from San Francisco, California, to Texas, due to concerns that he would not be able to get a fair trial in San Francisco.

Musk, it is safe say, seems to be pretty happy to be wrong about this one. After the rendering of the verdict he posted a message on Twitter, saying, "Thank goodness, the wisdom of the people has prevailed!"

"I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case," Musk added.

Written By:
Robert Ayers

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