August 9, 2022
Elon Musk’s ‘Tesla Funding Secure’ tweet is wrong and reckless, says court

A court said Elon Musk’s 2018 tweet that funds had been secured to take Tesla private was false and reckless, adding that at the time there was “nothing concrete” about funding from Saudi Arabia’s Sovereign Wealth Fund. was not”.

The decision by US District Judge Edward Chen of San Francisco is a major victory for investors, with Musk alleging that Musk inflated stock prices by making false and misleading statements, causing billions in losses.

In 2018, Musk met with representatives of Saudi Arabia’s Public Investment Fund and discussed taking Tesla private, but evidence suggests that “there was nothing concrete about the funding coming from PIF,” the judge said. wrote.

“Rather, the discussions between Tesla and PIF were clearly at an early stage. “No reasonable jury could find that Mr. Musk acted recklessly given his clear knowledge of the discussions,” he said.

He said details such as the total amount of money needed to take Tesla private or the price to be paid for Tesla stock were not discussed.

The summary decision, made on April 1, was sealed for more than a month before it became publicly available on Tuesday. “This is extremely important,” shareholder attorney Nicolas Porit, a partner at Levy & Korsinski LLP, told Reuters.

He said the class action plaintiff gets a summary judgment on the lie and the scientist before going to the jury trial to be held in January.

The remaining issue is what harm is caused to the shareholders by deliberately making false statements, he said.

The judge declined to deliver a summary judgment to shareholders on the question of whether the alleged false statements actually affected Tesla’s share prices.

Lawyers for Musk, who has filed a motion to undo the court’s decision, were not immediately available for comments. Musk recently said that the funding to take Tesla private in 2018 was indeed secure.

The latest decision was in line with a complaint from the US security regulator, which in 2018 sued Musk for fraud charges for the tweet. He settled with the US Securities and Exchange Commission, stepped down as Tesla’s chairman, paid the fine, and agreed to hire a lawyer. Please approve some of his tweets before posting.

© Thomson Reuters 2022

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