New Lawsuit Tussle Between Elon Musk, Tesla Investors Raises Red Flags About Twitter Deal
Tesla shareholders filed a fraud lawsuit against Musk in 2018 after he posted 218 tweets about taking the company private, which he didn’t do.
A federal judge determined last week that Musk’s claims that he had secured funding to take Tesla private were false and misleading. The judge also found that Musk made the false statements recklessly and with full awareness of the facts that he misrepresented.
Musk’s behavior in the Tesla case is particularly pertinent now as he angles to purchase Twitter, which he has promoted as a way to bolster free speech. Twitter rejected his hostile bid, but Musk hinted over the weekend that it’s not over.
Despite the judge’s ruling in the Tesla case, Musk repeated the exact same claim — that he had secured funding to take the carmaker private — at last week’s TED 2022 Conference in Vancouver, Canada.
“So I was forced to concede to the SEC unlawfully,” he said of Securities and Exchange Commission regulators, according to Reuters. “Those bastards.”
“I was forced to admit that I lied to save Tesla’s life and that’s the only reason,” Musk added.
After Musk’s TED comments, Tesla stockholders asked U.S. District Judge Edward Chen to shut down Musk’s “public campaign to present a contradictory and false narrative” about his 2018 tweets.
Musk and Tesla each paid $20 million in civil fines after the Tesla tweets, and Musk stepped down as Tesla’s chair to settle SEC claims that he had defrauded investors with his false messages.
Musk “had no real planning” when he tried to take Tesla private, New York Times columnist James Stewart said on CNBC last week. “It was all just something [Musk] did on impulse.”
Referring to Musk’s Twitter offer, Stewart asked: “Now are we dealing with a situation like that again?”