Judge Upholds Musk Twitter Investor Fraud Verdict
A federal court has rejected Elon Musk’s bid to overturn a fraud finding tied to his 2022 bot tweets, leaving up to $2.6 billion in damages potentially due to investors.
Key Takeaways:
- US District Judge Charles Breyer denied Musk’s motion to set aside the jury verdict in most respects.
- The jury ruled that two of Musk’s May 2022 tweets about the Twitter takeover were materially false or misleading.
- Investors claim losses could amount to $2.6 billion, and the judge granted prejudgment interest.
- Breyer cited evidence that Musk’s 13 May tweet was literally untrue, stating "buyer’s remorse is not an exception to the securities laws."
- One narrow victory for Musk: the judge agreed there was insufficient evidence that a separate tweet caused investors market losses.
Background:
The case stems from Musk’s chaotic pursuit of Twitter in 2022, where he initially agreed to buy the company but later attempted to back out, citing spam accounts. Twitter sued to force the deal, and Musk ultimately closed at $54.20 per share before renaming the platform X.
Investors sued, alleging Musk deliberately talked down the stock price to renegotiate or exit the deal. While the jury agreed he misled the market, they rejected a broader scheme claim.
Additional Legal Fronts:
This ruling adds to Musk’s legal challenges, including a recent settlement with the SEC over late disclosure of an initial Twitter stake and ongoing battles with Sam Altman over OpenAI, all while steering newly public SpaceX.