Elon Musk, probably one of the most talked about people of 2022 and the CEO of electric car giant Tesla, will face trial on Tuesday over allegedly manipulating the stocks with a tweet, back in August 2018, after a federal judge rejected his request to move the case out of California.
In 2018, Musk tweeted that he had sufficient funding to take Tesla private, causing a whirlwind in the company’s share price. Tesla shareholders argued it would be unfair to move the trial to Texas as requested by Musk, who has outraged many in Northern California with the steep job cuts he ordered at Twitter, a San Francisco company he bought in October.
Shareholders swiftly sued Musk for allegedly costing them billions of dollars with the Twitter post that said funding was “secured” to buy out the company’s shareholders.
According to a spokesperson for the court, Judge Edward Chen on Friday refused to transfer the proceedings to Texas. In this southern state, Musk moved Tesla’s headquarters and jury selection is scheduled to begin on Tuesday. The court filing by the shareholders says:
“What they refer to as ‘biased’ coverage is, in fact, factual reporting about his management of Twitter, Inc., and has no bearing on the jury’s ability to render a fair verdict,” said
Defense lawyers had argued that the multibillionaire would be denied a fair trial in San Francisco, where he bought Twitter in late October and has been widely criticized for his decisions since taking over the social media firm. Musk’s lawyers said in the filing that:
“For the last several months, the local media have saturated this district with biased and negative stories about Mr. Musk that have fostered… highly prejudicial biases in the jury pool,”
“The local media, in a deviation from how they typically cover these stories, have blamed Mr. Musk personally for the reductions and even accused him of violating the law,”
Videos of an audience booing Musk during a surprise appearance at a Dave Chappelle show in San Francisco in December were circulated online. “It sounds like some of the people you fired are in the audience,” the comedian said in the clip.
Musk later admitted it was “a lot of boos” and added a now-deleted tweet: “It’s almost as if I’ve offended SF’s unhinged leftists … but nahhh.”
The US stock market regulator, the Securities and Exchange Commission, ordered that Musk step down as chairman of the board of Tesla and pay a fine of $20 million.
Shareholders accuse Musk of causing billions of dollars in losses for investors by making false and misleading statements to artificially inflate the stock price. Musk tweeted in August 2018 that he had “funding secured” to take Tesla private, sparking 10 days of volatile trading in its stock shares, bonds, and options.
Defendants, which also include Tesla and its board at the time, will make their case that Musk was not misleading investors in a material way. Musk had met Yasir Al-Rumayyan, the managing director of Saudi Arabia’s sovereign wealth fund, on multiple occasions, according to the court filing, which also said Al-Rumayyan had urged Musk to take Tesla private and offered up to $60 billion in backing.
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