Elon Musk, CEO of Tesla, has been cleared of violating federal securities law in a case brought by investors who claimed he tweeted false information in 2018 about potentially taking Tesla private. The nine-person jury found that the investors failed to prove their claims against Musk or Tesla.
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.
— Elon Musk (@elonmusk) February 3, 2023
The case arose from tweets made by Musk more than four years ago in which he proposed taking the company private. He later agreed to pay $20 million to settle a securities-fraud charge brought by the Securities and Exchange Commission over the same tweets.
The deal never materialized, leading to the investors suing, alleging that the tweets were untrue and that relying on them caused them to lose billions.
Musk testified during the trial that he was confident he had the funding to take Tesla private and that he tweeted to inform shareholders, not mislead them.
The jury decided that the tweets were not material to investors and did not cause them to sustain losses.
This case is another example of Musk’s willingness to go to trial, as fewer than 0.2% of federal securities class-action cases have gone to trial, and of those that have, both plaintiffs and defendants have won roughly half the time.