Jury finds Elon Musk misled investors during Twitter purchase, absolves him of some fraud claims

SAN FRANCISCO — A jury found Elon Musk liable for misleading investors by deliberately driving down Twitter’s stock price in the tumultuous months leading up to his $44 billion acquisition of the social media company in 2022. But it cleared him of some fraud allegations, finding that he had not engaged in a “scheme” to mislead investors.

The civil lawsuit in San Francisco focused on a class-action lawsuit filed just before Musk took control of Twitter, which he later renamed X. Jurors were asked to decide whether two tweets and comments Musk made on a podcast in May 2022 amounted to intentional defrauding of Twitter shareholders, who sold their shares based on Musk’s statements.

The nine-person jury returned the verdict after 3 days of deliberation, approximately three weeks after the trial began on March 2. They said Musk was responsible for misleading investors in two tweets, including one in which he said the Twitter deal was “temporarily on hold,” but that he did not do so in a statement he made on a podcast, and that he did not deliberately “scheme” to defraud investors.

Since this is a class-action lawsuit, it’s unclear how much damages Musk will have to pay to thousands of shareholders, many of whom are institutional investors, but it’s likely to run into the billions of dollars. The jury awarded shareholders approximately $3 to $8 per share per day

Musk’s wealth is currently estimated at around $814 billion, with much of that tied up in Tesla shares.

Much of the hearing focused on Musk’s claims about the number of bots on Twitter. Musk stated that Twitter has a much higher number of fake and spam accounts than the 5% it disclosed in regulatory filings. He used Twitter’s misrepresentation of the number of fake accounts on its services as reason to back out of the acquisition.

After Musk tried to back out, Twitter went to court in Delaware to force him to honor his original agreement. Just before this case went to trial, Musk reversed course once again and agreed to pay the amount he had originally promised.

This article was generated from an automated news agency feed without modifications to the text.