(CTN News) – Tesla shareholders who are suing Elon Musk and Tesla over alleged securities fraud won part of a critical ruling in their class-action lawsuit.
Elon Musk tweeted in 2018 that he may take Tesla private, at $420 per share and said he had funding for it. Tesla shareholders are suing for money they lost.
Judge Rules Elon Musk Go-Private Tweet False, Tesla Investors Say
Tesla’s stock price was highly volatile for weeks after the tweets. Elon Musk said he had been in talks with Saudi Arabia’s sovereign wealth fund and felt confident that funding would be available at his price. There was no deal.
SEC charged Elon Musk with civil securities fraud as a result of those tweets. Tesla and Musk reached a revised settlement agreement in 2019 over those charges, but Musk is trying to terminate that deal now.
There could be billions of dollars in damages that Elon Musk and Tesla would have to pay to class members.
According to the shareholders‘ attorneys, Judge Edward M. Chen, who is presiding in this case, concluded that Musk committed scienter – that is, that he knowingly falsely stated he had secured funding when he tweeted.
The shareholders’ lawyers requested a temporary restraining order against Elon Musk to prevent him from speaking publicly about this case in the future, as he did during a widely viewed appearance at TED 2022 on April 14.
It cites an earlier ruling by Judge Chen that is currently under seal since it refers to evidence Musk’s team deemed confidential. Adam Apton of Levi & Korsinsky, lead counsel for Tesla shareholders, told CNBC the order will be published soon.
Musk called financial regulators in the SEC’s San Francisco office “bastards” at the TED conference on Thursday, Read More.