A US judge has classified a momentous tweet by Tesla founder Elon Musk regarding his company’s IPO as “false and misleading”.
According to documents filed with the court late Friday night, federal judge Edward Chen, in an unpublished partial decision in the electric-car maker-investor case, found that Musk “recklessly and knowingly” disseminated false facts in 2018.
The document is part of a lawsuit filed by investors once morest Tesla and Musk for securities fraud. They accuse Musk of triggering price fluctuations and inflicting heavy losses on them with a Twitter post on August 7, 2018. In that tweet, Musk claimed that he had “secured” funding to take Tesla private at $420 per share.
Trouble with the stock exchange regulator
Musk only insisted on Thursday that his statements at the time were correct. Accordingly, at the time he was in talks with the Saudi Arabian sovereign wealth fund regarding buying up all Tesla shares and was confident that these negotiations might be concluded successfully. However, no agreement was ever announced.
Investors are now asking the judge to bar Musk from repeating the allegations. The plaintiffs accuse Musk of promoting “an inconsistent and incorrect” interpretation of the tweet in question, which might bias a jury in a court hearing scheduled for May.
In addition to the investor lawsuit, Musk had also gotten into trouble with the US Securities and Exchange Commission through the tweet. They had also accused him of fraud. In a settlement, Musk eventually agreed to step down as chairman of Tesla’s board of directors and pay a $20 million fine.
He also committed to requiring lawyers to pre-approve his tweets that directly relate to Tesla’s business. Musk challenged this last measure in court in early March. He said Thursday he was forced into the deal with the SEC to save Tesla. Musk is currently trying to buy the online service Twitter himself.
