(Detroit) A group of Tesla shareholders is suing CEO Elon Musk over tweets from 2018 about taking the company private. The group is asking a federal judge to order Mr. Musk to stop commenting on the case.
Posted April 17
Attorneys for the Austin, Texas-based company’s shareholders also said in court papers that the judge hearing the case ruled Elon Musk’s tweets about “secured funding” to take Tesla private were false. Additionally, the judge had said his comments violated a 2018 legal settlement with U.S. securities regulators, in which Mr. Musk and Tesla each agreed to pay fines of $20 million.
In a Thursday interview at TED 2022, Elon Musk mentioned he had the funding to take Tesla private in 2018. He called the US Securities and Exchange Commission (SEC) a vulgar name and he indicated that he only paid the fine because the bankers told him they would stop providing capital if he didn’t, and that Tesla would go bankrupt.
The interview as well as the lawsuit came just days after Mr Musk, the world’s richest person, made a controversial bid to take over social network Twitter and turn it into a private company with a offer of $43 billion, or the equivalent of $54.20 per share. Twitter’s board of directors on Friday adopted a defense strategy that would make buying the shares excessively expensive for Elon Musk.
In court documents filed Friday, attorneys for Tesla shareholders alleged that Mr. Musk was trying to influence potential jurors in the trial. They argue that Elon Musk’s 2018 tweets about having the money to take Tesla private at a cost of $420 per share were written to manipulate the share price, which costs investors money. shareholders.
Now lawyers say Elon Musk is campaigning to sway potential jurors as the case moves closer to trial.
“Mr. Musk’s comments risk confusing potential jurors with a false narrative that he did not deliberately misrepresent his August 7, 2018 tweets,” the attorneys wrote. His current statements on this issue, an unsubtle attempt to evade the court of public opinion, will only have a detrimental influence on a jury. »
The attorneys asked Judge Edward M. Chen in San Francisco to restrain Mr. Musk from making any further public comments on the issue until after the trial. Mr. Chen has given Elon Musk’s lawyers until Wednesday to respond.
Alex Spiro, an attorney representing Mr. Musk, wrote in an email Sunday that the plaintiffs’ attorneys were seeking a large payout. “Nothing will ever change the truth that Elon Musk was considering taking Tesla private and could have done so,” he wrote. All that’s left half a decade later are plaintiffs’ attorneys trying to make money and others trying to keep the truth from coming to light. All this to the detriment of freedom of expression. »
Lawyers for the shareholders wrote that Mr. Chen had previously ruled that Mr. Musk’s tweets were false and misleading, and “no reasonable juror could conclude otherwise”.
After Elon Musk’s tweets in 2018, the US Securities and Exchange Commission (SEC) filed a lawsuit against him alleging securities law violations. Mr. Musk then accepted the fine and he signed the court agreement. Part of the settlement states that Elon Musk “shall not take any action or make or permit to be made any public statement that directly or indirectly denies any allegation contained in the complaint or creates the impression that the complaint is without factual basis. »
If Elon Musk violates the agreement, the SEC can ask the court to quash and reinstate the securities fraud claim, the agreement says.
Attorney Alex Spiro, on behalf of Elon Musk, has already asked a federal court in Manhattan to throw out the deal. He argues that the SEC is using the contract and “nearly unlimited resources” to limit Mr. Musk’s speech. Court documents filed by Mr. Spiro indicate that Elon Musk signed the deal when Tesla was a less mature company and the SEC action compromised its funding.