Musk found guilty of misleading investors

The world richest man could end up paying up to $2.6 billion in damages, the plaintiffs’ attorneys have said

Tesla and SpaceX CEO Elon Musk has been found guilty in California of misleading investors during his $44 billion purchase of Twitter in 2022.

The class-action lawsuit, which had been filed shortly before Musk took control of the social media platform that he subsequently re-branded as X, focused on two tweets and comments made by the tech billionaire during a podcast in May 2022. Following those statements, including a post claiming that the Twitter deal was “temporarily on hold,” the company’s shares plunged by almost 10% in a single session.

The nine-man jury in San Francisco delivered its verdict on Friday, stating that the tech billionaire did mislead the shareholders, who sold Twitter shares at a lower price as a result of his announcements, with the tweets.

However, it also found that there was nothing wrong with what Musk said on the podcast and that he did not intentionally “scheme” to mislead the investors.

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The Tesla and SpaceX CEO could end up paying up to $2.6 billion in damages, according to the lawyers of the Twitter shareholders. Musk’s fortune is estimated at some $814 billion.

The verdict is “an important victory, not just for investors of Twitter, but for the public markets” that “sends a strong message that just because you’re a rich and powerful person, you still have to obey the law,” Mark Molumphy, an attorney for the plaintiffs, insisted.

Musk’s lawyers said that they will appeal the ruling. “We view today’s verdict, where the jury found both for and against the plaintiffs and found no fraud scheme, as a bump in the road,” the legal team at Quinn Emanuel Urquhart & Sullivan said in a statement.

Musk, who is an extremely active user of X, has not yet commented on the jury’s decision.

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The billionaire is often dubbed “Teflon Elon” for his ability to come out on top in the most difficult legal cases. In 2023, a jury in the same San Francisco court cleared him of similar charges of misleading investors, following Musk’s claims in 2018 that he had the funds to turn Tesla from a publicly traded company into a private one. That deal never happened.