A court said that Elon Musk’s 2018 tweets that funding had been secured to take Tesla private were inaccurate and inconsiderate, saying that “there was nothing concrete at the time” about Saudi sovereign wealth fund funding -Arabia gave.
The decision by US District Judge Edward Chen of San Francisco is a major victory for investors who claim Musk inflated stock prices through false and misleading statements and caused billions of dollars in damages.
In 2018, Musk met with officials from the Public Investment Fund of Saudi Arabia and had a discussion about taking Tesla private, but evidence shows “there was nothing concrete about funding from the PIF,” the judge wrote.
“Rather, talks between Tesla and the PIF were clearly in the preliminary stages. “No reasonable jury could find that Mr Musk did not act recklessly given his clear knowledge of the talks,” he said.
He said details such as the total amount of funds required to make Tesla private or the price to be paid for Tesla shares were not discussed.
The April 1 summary judgment was sealed for more than a month before being released to the public on Tuesday. “This is of tremendous importance,” shareholder attorney Nicholas Porritt, a partner at Levi & Korsinsky LLP, told Reuters.
He said class action plaintiffs will receive a summary judgment of falsehood and scientificity before proceeding to a court hearing scheduled for January.
The remaining question is what harm the intentionally false statement did to shareholders, he said.
The judge declined to give shareholders summary judgment on whether or not the allegedly false statements actually impacted Tesla’s stock prices.
Musk’s attorney, who filed requests to have the court’s verdict set aside, was not immediately available for comment. Musk recently said that funding for Tesla’s 2018 privatization was indeed secured.
The latest ruling came in line with a complaint from the US security agency, which was suing Musk over allegations of fraud for the 2018 tweets. He settled with the US Securities and Exchange Commission, resigned as Tesla chairman, paid fines and agreed to hire a lawyer to approve some of his tweets before publishing them.
© Thomson Reuters 2022
https://gadgets360.com/transportation/news/elon-musk-tesla-funding-secured-tweet-2018-reckless-inaccurate-court-2965574 Elon Musk’s “Tesla Funding Secured” Tweet Is Inaccurate And Inconsiderate, Court Says