Tesla Inc CEO Elon Musk “lied” when he said funding was “secure” to take the company private, a lawyer for Tesla investors said Wednesday, with Musk’s lawyer arguing that the billionaire simply “misrepresented” the company. Used when he tweeted about his plans in 2018.
Tesla investor Glen Littleton is seeking damages on behalf of shareholders who traded the company’s stock in the days after Musk posted on Twitter his plans to take the company private in August 2018.
Musk’s alleged lies caused “regular people” to lose millions, Nicolas Porritt, lead attorney for investors, told a jury san francisco during opening statements.
“When their lies were exposed, millions of dollars were lost,” he said.
Musk’s attorney disputed this characterization, saying the billionaire was “serious” about taking the company private in 2018, but ultimately faced shareholder opposition.
Alex Spiro said during opening statements, “You’ll find out very quickly that this was not a hoax, not even close.”
Musk believed financing was not an issue and was “taking steps” to get the deal done, Spiro told the jury.
While the tweets contained “technical inaccuracies,” Musk was concerned that some investors knew about his go-private plan and wanted to get information to the “daily shareholder” that he “wanted to protect,” Spiro said.
He said that in a hurry he used the wrong words.
The case is a rare securities class action trial, and Musk and his company are pushing the criteria for settling claims that clear high legal hurdles, leading to a potentially dramatic trial at which Musk himself took the stand earlier this week. looking forward to taking.
A nine-member jury will decide whether the tweets artificially inflated Tesla’s stock price by playing up the funding situation for the deal, and if so, by how much.
The defendants include current and former Tesla directors, whom Spiro said had “pure” motives in their response to Musk’s plan.
Tesla’s share price jumped in response to Musk saying Wednesday that he is considering taking the company private, which he said is true, Spiro said Wednesday. Spiro said it didn’t jump on Musk’s claim about the funding.
US District Judge Edward Chen, who is overseeing the trial, ruled that Musk’s statements about the status of the deal were false and that Musk made them recklessly. The deal didn’t happen.
While shareholders sue hundreds of companies and their executives each year for alleged securities fraud, very few of those cases make it to trial. The vast majority are either dismissed or settled by the courts.
Some of Musk’s critics were not among the jurors selected Tuesday, such as one prospective juror who said the chief executive, who has gained a reputation for the unpredictable, was “a little off his rocker.”
After opening statements, the shareholders began calling witnesses to the stand, beginning with investor Littleton.
The text of this story is published from a wire agency feed without any modification.
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