The decision-making process was lightning fast. Despite the difficulty of making precise comparisons between cases, both the jury trials of fraud suspects Elizabeth Holmes and Martin Shkreli lasted many days. To make his choice, Musk needed much less time.
An attorney for a group of Tesla investors who say they lost a lot of money as a result of Musk’s tweet presented final arguments to the jury in the billionaire’s securities fraud trial while Musk sat in the gallery. Attorneys for Musk also testified, saying their client was innocent but for “bad word choice.” The alternative to paying out billions in damages was accepted, so Musk can walk away untouched.
The jury has spent weeks listening to a parade of witnesses, including Musk himself, describe what happened before and after the tweet on August 7, 2018.
Musk said he was confident in his ability to take Tesla private after meeting with the Saudi sovereign wealth fund. However, Musk pulled out of the transaction within a few of weeks, costing some Tesla shareholders billions. Although the jury had not yet heard any testimony, District Court Judge Edward Chen had already told them to assume Musk’s tweet was fake and explore the question of whether Musk had intentionally misled investors to their financial detriment.
Musk had already settled with the Securities and Exchange Commission over the tweet for $40 million, which included his resignation as head of the business but did not require him to admit wrongdoing. (Musk has since maintained that he was pressured into the deal.)
The plaintiffs’ counsel, Nicholas Porritt, said that Musk should be held liable for his misleading tweets in his closing statement. Porritt stated that the matter came down to whether or not Elon Musk should be subject to the same regulations as everyone else. We can’t let billionaires play by a different set of rules.
In his opening statement, Porritt took the jury through the evidence of the plaintiff Tesla investors and the numerous expert witnesses who, according to Porritt, gave statistics showing how changes in the stock price in and around the August 7 tweet caused the plaintiffs to lose money.
In his tweets, Musk “recklessly disregarded the facts,” as Porritt put it. In addition, investors suffered significant losses as a result of such tweets. Just that is enough to establish fault in this case.
A terrible tweet does not necessarily indicate fraud.
Experts from the investment banking sector have testified in the past that the deal’s structure was still unclear many days after the tweet. Musk testified that he was confident in his ability to take Tesla private using only his own fortune and the value of his share in his private space firm, SpaceX.
Text communications between Musk, CEO of Tesla, and Yasir Al-Rumayyan, governor of Saudi Arabia’s Public Investment Fund, contradicted Musk’s statement, according to Porritt. According to the counsel, Musk sought to intimidate the Saudi official by threatening to cut him off until he publicly endorsed the take-private arrangement.
We can’t let billionaires play by a different set of rules.
He claimed that Tesla should shoulder some of the blame for allowing Musk and his Twitter account to act as the company’s principal source of communication. According to Porritt, “Tesla deliberately sought to make Elon its public image,” with his Twitter account serving as the company’s principal source of news and information.
Spiro’s last argument, in contrast, was lengthy and confusing, with many allusions to Musk as a “child in the witness stand” or a “kid from South Africa.” (Musk turned 51 this year.)
The crux of Spiro’s case was that the jury should assume Musk tweeted “funding secured” because he honestly believed he would have “ample financing” to take Tesla private. Spiro conceded that the tweet was “technically wrong,” but insisted that it was not fraudulent.
A terrible tweet doesn’t always indicate fraud, Spiro said.
“Elon Musk tweeted bogus information with complete indifference to the truth.”
“If you believe what I think I heard [Porritt] say, then you should infer that Elon Musk committed fraud. He didn’t, though. “It’s not even close,” Spiro said. “Elon Musk could have taken Tesla private, and he was thinking about doing it. The fact that funding wasn’t a problem is an eternal reality.
Spiro claimed that holding Musk accountable for Tesla’s price volatility would show a basic ignorance of how the market works. “Stocks change all the time for a variety of reasons,” he explained. They are constantly changing locations, but they are determined to punish Musk for uttering only two words.
Spiro instructed the jury that they need not agree with them about Musk or his tweets in order to see that the claim is without basis. “Some of his tweets, I don’t like either,” Spiro said.
Musk smiled at a joke made by Chen about whether it’s “metaphysically conceivable” for plaintiffs to show a “material misstatement” before the attorneys began their presentations. Apparently, he also offered to help out when the court’s IT was having issues.
Nonetheless, Musk was not concerned about his own fate or the verdict in the minutes leading up to the jury’s seating. A Twitter-related topic was the subject of his tweets.
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