The court says Musk ruthlessly tweeted that “funding secured” to take Tesla private

SAN FRANCISCO, May 10 (Reuters) – A court ruled that Elon Musk’s tweets from 2018 that funding was secured to take Tesla private were inaccurate and ruthless, saying that “there was nothing concrete” about funding from Saudi Arabia sovereign wealth fund at the time.

The decision by U.S. District Court Judge Edward Chen of San Francisco is a major victory for investors who claim that Musk inflated stock prices by making false and misleading statements, causing billions in damages.

In 2018, Musk met with representatives of Saudi Arabia’s public investment fund and had a discussion about taking Tesla private, but evidence shows that “there was nothing concrete about funding from PIF”, the judge wrote.

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“Rather, the discussions between Tesla and PIF were clearly at the preliminary stage.

“No sensible jury could find that Mr. Musk did not act ruthlessly given his clear knowledge of the discussions,” he said.

He said details such as the total amount needed to take Tesla privately or the price to be paid for the Tesla share were not discussed.

The summary verdict, handed down on April 1, was sealed for more than a month before it became publicly available on Tuesday.

“It’s hugely significant,” shareholder lawyer Nicholas Porritt, a partner in Levi & Korsinsky LLP, told Reuters.

He said that it is the case that class actions are given a brief verdict on falsehood and a scientist before they go to a jury trial, scheduled for January.

The remaining question is what damage the deliberately false statement has inflicted on shareholders, he said.

The judge refused to give shareholders a brief ruling on the question of whether the allegedly false statements actually affected Tesla’s share prices.

Musk’s lawyer, who has filed a motion to undo the court decision, was not immediately available for comment. Musk recently said that funding was actually secured to take Tesla private in 2018.

The latest ruling was in line with a complaint from the US security regulator who sued Musk for fraud allegations for the tweets in 2018. He made a settlement with the US Securities and Exchange Commission, resigned as Tesla chairman, paid fines and agreed to get a lawyer to approve some of his tweets before posting them.

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Reporting by Hyunjoo Jin; Edited by Stephen Coates

Our standards: Thomson Reuters Trust Principles.

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