Monitoring Desk
SAN FRANCISCO: Tesla founder Mr Elon Musk has been cleared of fraud charges for a tweet claiming he had “funding secured” to take the electric carmaker private.
Mr Musk faced a class-action lawsuit on behalf of Tesla shareholders who argued Musk misled them with his posts in August 2018.
The proposed $72bn (£60bn) buyout never materialized.
If the San Francisco court had found Mr Elon Musk liable, he could have been ordered to pay billions of damages.
It took the nine judges less than two hours to reach their decision on Friday afternoon.
Mr Elon Musk – who had wanted the trial shifted to Texas, where Tesla is based, arguing he fears a fair trial in San Francisco – welcomed the verdict.
Elon Musk’s tweet
Taking to Twitter, the social networking platform he bought for $44bn in October last year, he posted: “Thank goodness, the people’s wisdom has prevailed!
“I deeply appreciate the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”
Central to the lawsuit was Mr Elon Musk’s tweet on August 7, 2018: “Am considering taking Tesla at $420. Funding secured.”
The complainant also argued Mr Musk had lied when he tweeted later that “investor support is confirmed.”
The stock price surged after Musk’s tweets but fell back within days as it became clear the deal would not go through.
According to an economist who was hired by the shareholders, investor losses were calculated as high as $12bn.
The Securities and Exchange Commission (SEC) of the US sued Mr Elon Musk over his tweets, accusing him of lying to investors. As Tesla board chairman, Mr Musk agreed to step aside and settle for $20m.
During the three-week trial, Mr Elon Musk – who also heads SpaceX and Twitter – had argued that he had a verbal commitment from the Kingdom of Saudi Arabia’s sovereign wealth fund for the agreement.
During his around nine hours on the witness stand, the world’s second-richest man said: “Just because I tweet something does not mean I will act accordingly or people believe it.”
