Court finds Musk recklessly tweeted ‘financing’ to make Tesla private.

SAN FRANCISCO, May 10 (Reuters) – A court said a tweet that Elon Musk had secured funds to take Tesla private in 2018 was inaccurate and reckless, calling it “no specific” about the Saudi sovereign wealth fund’s financing at the time. .

San Francisco’s US District Judge Edward Chen’s decision is a huge win for investors who claim Musk has inflated stock prices through false and misleading statements, causing billions of dollars in damages.

Musk met with the head of Saudi Arabia’s Public Investment Fund in 2018 to discuss making Tesla private, but evidence suggests that “there were no specific details of the financing coming from the PIF,” the judge wrote.

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“Rather, the discussion between Tesla and PIF was clearly in its infancy.

“No reasonable jury could find that Musk had not acted recklessly given his clear knowledge of the argument,” he said.

He said details such as the total amount of funds required to take Tesla private or the price owed for Tesla stock were not discussed.

The summary judgment, issued on April 1, was sealed for more than a month before being released on Tuesday.

“It’s very important,” Nicholas Portritt, a shareholder lawyer who is a partner at Levi & Korsinsky LLP, told Reuters.

He said the class action plaintiffs would receive a summary judgment of falsehood and scientific facts before going to a jury trial scheduled for January.

“The question that remains is how much harm was done to the shareholders by the willful misrepresentation.”

The judge refused to give a summary judgment to shareholders on questions about whether the false statements actually affected Tesla’s stock price.

Musk’s attorney, who filed the application to reverse the court decision, was not immediately available for comment. Musk recently said that the funds to take Tesla private in 2018 have indeed been secured.

The most recent ruling is consistent with a complaint from a U.S. security regulator who sued Musk for tweet fraud in 2018. He reached an agreement with the US Securities and Exchange Commission to resign as Tesla Chairman, pay the fine, and obtain the approval of an attorney. Some of his tweets before posting.

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Reporter Jin Hyun-joo; Edited by Stephen Coats

Our standards: Thomson Reuters Trust Principles.


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