Elon Musk and Tesla will go to trial for an alleged stock fraud

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Elon Musk and Tesla will go to trial for alleged stock fraud

Elon Musk will go to court. He was put on trial for an alleged stock market fraud. This Wednesday, the tech tycoon will sit in his chair. in the dock to testify in the class action lawsuit accusing him of manipulating the marketwith a series of messages published by He posted on Twitter in 2018 in which he assured his intention to take Tesla private.

“I am considering taking Tesla public at 420 dollars. The financing is insured,” assured Mr. four and a half years ago. Those tweets still haunt him. And it is that, after publishing them, the number of people skyrocketed. the value of the shares of the manufacturer of electric vehicles, thus triggering the also the fortune of Musk, owner of the majority of those shares. In a message to company employees, Musk said privatization was “the best way forward.”

One investor, Glen Littleton, sued. He then accused Musk and Tesla's board of directors assuring that the messages posted were false and that, by shaking up the market, their words cost him and other investors billions of dollars.

To date, Musk has claimed that he really did intend to take Tesla private and that he believed he had financial backing from the sovereign wealth fund. from Saudi Arabia. The operation was valued It cost $72 billion. It would have been one of the biggest in the history of the tech industry, but it never materialized.

Musk was reckless

According to Mr. As reported by the US press, the case is unusual because stock fraud lawsuits are usually settled with financial settlements to avoid going to trial. Judge Edward Chen, who will oversee the trial. the judgment, has already ruled that Musk's tweets about taking Tesla private were untrue and that he acted in the wrong way. recklessly when publishing them. That could make Musk choke on the case.

This Tuesday the trial will begin. the selection of the jury and on Wednesday it will be the turn of the jury. to Musk to appear. is The case is scheduled to run until February 1, thus adding to the case. More problems to the long list that the businessman faces, also at the helm of Twitter. Other members of Tesla's board of directors as well as other members of the Tesla board of directors may also appear at the trial. as Kimbal Musk, Elon's brother. Both are being investigated by the Securities and Exchange Commission because Kimbal sold the company. He sold part of his shares in the company before its value fell after it was learned that the announced Tesla going private would not occur due to the alleged use of privileged information.