BREAKING: Musk found guilty of deceiving shareholders in the purchase of Twitter
According to recent reports, the following story has emerged from the international scene.
ury Rules Elon Musk Misled Twitter Shareholders, Potential Billions at Stake
By France 24 with AFP and AP
Verdict in California: Mixed Outcomes for the Tesla CEO
A federal jury in California concluded Friday that Elon Musk misled Twitter shareholders, causing the stock price to decline as he moved forward with his $44 billion acquisition of the company.
However, the jury acquitted him of some fraud accusations, finding that he did not “orchestrate” a plan to deceive investors.
“This is an important victory, not only for Twitter investors, but for the markets in general,” said Mark Molumphy, attorney for the plaintiffs.
“The verdict sends a clear message: no matter how rich or powerful someone is, they must follow the law.”
The verdict in this securities class action lawsuit means that the world’s richest man could be ordered to pay billions of dollars, depending on the damages calculated by the jury. Minutes after the decision, Musk’s lawyers told AFP that their client will appeal, describing the ruling as a “setback.”
The Tweets That Sparked the Lawsuit
Following a three-week trial in federal court in San Francisco, which included in-person testimony from Musk, the jury found that two tweets posted in May 2022 by the Tesla and SpaceX CEO contained false claims that caused Twitter’s stock to decline.
Musk acquired Twitter in October 2022 after months of negotiations with the social media company’s board of directors, later renaming it X.
The lawsuit, filed by investor Giuseppe Pampena, represented people who sold Twitter shares between mid-May and early October 2022.
“If you move the market with your words, you must bear the consequences,” said Monte Mann, a business litigation attorney not involved in the case.
“The law has always prohibited misleading statements. What is new is scale and speed. When a single person can move billions with a tweet, the impact is multiplied, and juries begin to take it seriously.”
Financial Impact: Billions on the Line
Jurors set awards of between $3 and $8 per share per day, which the plaintiffs’ attorneys say is equivalent to about $2.1 billion in stock and another $500 million in options.
Musk’s fortune is currently estimated at around $814 billion, much of it tied to his stakes in Tesla. Forbes magazine earlier this month estimated his wealth at $839 billion, primarily from Tesla and SpaceX holdings.
A Rare Judicial Setback
The ruling represents a rare defeat for Musk, often nicknamed “Teflon Elon” for his ability to emerge unscathed from litigation. His lawyers reminded AFP that, on the same day, a Texas court exonerated him in another defamation case.
In 2023, another San Francisco jury quickly acquitted him of similar accusations brought by Tesla shareholders over his 2018 tweets about possibly taking the company private.
Strategy or Misstep?
The civil suit alleged that Musk drove down Twitter’s share price to renegotiate the purchase or withdraw from the deal, causing losses to investors who sold their shares.
“These statements were part of a strategy to pressure the board of directors to accept a lower price than initially offered, at a time when Tesla shares were falling and Musk needed to sell more securities to finance the operation,” the plaintiffs argued.
Musk eventually abandoned his attempt to withdraw from the purchase at the end of 2022, after Twitter took him to court to force him to honor the contract. Since then, he has integrated the social network with his AI company xAI and his aerospace company SpaceX.
This case underscores the risks of market influence in the social media era and serves as a reminder that even the world’s wealthiest individuals must answer to the law.
© Josh Edelson / GETTY IMAGES NORTH AMERICA/AFP
Editor’s Insight:
Experts suggest this event marks a turning point that may influence policy decisions worldwide.
World leaders are expected to respond to these developments in the coming days.
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Source: This article was originally published in another language by France 24 – Noticias y actualidad internacional en vivo and has been translated and adapted for our global English-speaking audience. Read the original article here.