Elon Musk found not guilty of fraud over Tesla stock tweets

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Elon Musk found not guilty of fraud over tweets about Tesla stock

Elon Musk is the big boss of Tesla and SpaceX, among others.

A little respite for Elon Musk, plagued by turmoil in his businesses: a California jury found him not guilty of fraud on Friday for his tweets claiming in 2018 that he was going to take Tesla out of the stock market. /p>

Jurors quickly reached this verdict on Friday after three weeks of a trial triggered by the complaint of investors who felt they had been wronged by the messages of the multi-entrepreneur .

The latter had surprised the markets on August 7, 2018 by saying on Twitter that he wanted to withdraw his auto group from Wall Street at a price of 420 dollars per share, or 23% more than the closing price the day before, then ensuring funding was secure.

The stock surged, ending up 11% on the day, before declining in the following days.

< p class="e-p">Investors then betting on a drop in the action, short-sellers, believed that Elon Musk had broken stock market laws by presenting misleading information that caused the action to rise, and demanded compensation.

The judge in charge of the case, Edward Chen, had already concluded that the tweets were indeed misleading and that the entrepreneur had acted irresponsibly.

Jurors had to decide whether the tweets artificially inflated the action and, if so, how much this may have affected the plaintiffs.

They then had to determine whether members of Tesla's board of directors could be held responsible.

By answering the first questions in the negative, the jurors quickly exonerated Elon Musk and Tesla.

“Thank goodness the wisdom of the people prevailed! I am deeply grateful to the jury for unanimously finding my innocence.

— Elon Musk, on Twitter

For Dan Ives, of the Wedbush cabinet, this decision dispels one of the shadows hanging over Tesla.

The electric vehicle manufacturer did indeed generate record profits in 2022. But given the economic situation, some investors doubt the strength of demand for its high-priced cars in an increasingly competitive market.

Elon Musk must also manage a complicated situation at Twitter, which he has taken in turmoil since becoming owner at the end of October by laying off more than half of the employees or making controversial decisions like the return internet users suspended by the previous leadership, including former US President Donald Trump.

At the helm at the start of the trial for three days, the multi-billionaire assured that he had never sought to deceive investors. He really thought he had access to enough money following a meeting with the Saudi sovereign wealth fund, he said, pointing out that he could also have sold shares of his other flagship, SpaceX .

Tesla, however, quickly abandoned the idea of ​​leaving the stock market.

The American stock market policeman, the SEC, believing that the boss had not provided proof of his financing, forced him to cede the chairmanship of the board of directors and pay a fine of 20 million dollars. He later demanded that his tweets directly related to Tesla's business be pre-cleared by a competent legal practitioner.

On Friday, during his closing argument, the x27;lawyer for the plaintiffs Nicholas Porritt had tried to argue that Elon Musk could not with impunity advance false information that could influence investors.

Market Rules financiers are there to make sure everyone is held to the same standards, including billionaires, the lawyer had pointed out. Do the rules apply to everyone or can Elon Musk do what he wants without facing the consequences?

The Lawyer of the boss, Alex Spiro, had for his part admitted that writing secure financing was technically inaccurate.

But financing was never the problem, he said. he repeated several times. Just because it's a bad tweet doesn't make it a fraud.