Tesla Shareholders Sue Elon Musk Over 2018 ‘Secured Funding’ Tweet

Billionaire Elon Musk returns to court this week for a legal clash with jilted Tesla shareholders who claim his infamous 2018 tweet “secured financing” cost them a fortune.

The class action trial began Tuesday U.S. time with jury selection in San Francisco Federal Court.

Musk is expected to take the stand as the star witness during the proceedings New York Post reports.

Tesla shareholders are seeking unspecified monetary damages. Prosecutors allege that Musk caused billions of dollars in losses with his August 7, 2018 tweet in which he claimed he secured “secured financing” to take over Tesla at $420 per share. The alleged deal never materialized.

Musk is already at a disadvantage at trial. District Court Judge Edward Chen, who is presiding over the case, ruled last April that Musk’s tweet and other posts on the subject were “false and misleading” and that the billionaire acted “recklessly given his apparent knowledge of the discussions.”

Chen also determined that there was “nothing concrete” to support Musk’s claims that he secured an agreement with Saudi Arabia’s Public Investment Fund at the time. Musk has denied any wrongdoing and has argued that he was involved in genuine discussions with potential investors over the private transfer deal.

Juries will assess whether Musk’s actions directly caused financial harm, which could put the Tesla CEO on the hook for significant damages to affected shareholders.

Last week, Chen blocked an attempt by Musk’s lawyers to move the trial venue from San Francisco to a federal court in Texas.

Musk’s team contended that the city’s potential jury pool was biased by the polarized response to his $44 billion acquisition of Twitter, which is based in San Francisco.

Attorneys for Tesla shareholders have opposed the transfer request, asserting that Musk was a “celebrity” whose actions require close scrutiny no matter where.

“For better or worse, Musk is a celebrity who gets media attention around the world,” attorneys for the shareholders said in a court filing.

His Twitter footprint alone is partially responsible for this. If “negative” attention was all that was needed to disqualify the jury group, Musk would be effectively unacceptable to a jury due to his knack for attracting “negative” coverage.

The jury nominees were asked to answer a slew of questions about their opinions of Musk, including whether they own Tesla cars.

Musk’s 2018 tweet drew scrutiny from the US Securities and Exchange Commission (SEC), which slapped the billionaire and Tesla with separate discoveries worth $20 million. Musk was also required to enter into a consent decree whereby his tweets and other public communications must be pre-approved by the company’s attorneys.

Since then, Musk has claimed he was forced to agree to the SEC settlement. In a separate legal battle, the billionaire asked a judge to overturn the consent decree.

This article originally appeared in the New York Post and is republished with permission

Originally published as Elon Musk heads to trial over Tesla’s 2018 ‘funding secured’ tweet

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