SAN FRANCISCO, Jan 20 (Reuters) – Elon Musk, Tesla Inc (TSLA.O) The chief executive is likely to be called to testify in a grand jury trial in 2018 over a Twitter post that he “financed” to take the electric car maker private, which shareholders claim cost them millions in trading losses.
The trial in San Francisco federal court concluded with investor Timothy Fries telling the jury that he lost $5,000 buying Tesla stock after Musk sent a tweet at the center of the lawsuit.
Musk, known for battle testimonyhe is expected to discuss why he insisted a Saudi investor backed the deal that never came together and whether he knowingly made a materially misleading statement in his tweet.
Case a rare securities class action The court and the plaintiffs have already cleared a high legal hurdle when US Judge Edward Chen ruled last year that Musk’s post was false and reckless.
Shareholders Musk claimed to be he lied when tweeting, costing investors dearly.
Fries told the jury that the secured funding meant for him “there has been some scrutiny, some critical review of these funding sources.”
Musk’s attorney, Alex Spiro, told jurors in his opening statement Wednesday that Musk believed he was receiving funding from Saudi backers and was taking steps to implement the deal. Fearing leaks to the media, Musk tried to protect the “everyday shareholder” by tweeting “technical inaccuracies,” Spiro said.
Harvard Law School professor Guhan Subramanian told the jury that Musk’s behavior in 2018, tweeting his interest in Tesla without proper financial or legal analysis, lacked the hallmarks of a traditional corporate deal.
“Compared to the standard template, this is extreme,” Subramanian said, calling Musk’s approach “unprecedented” and “inappropriate.”
A nine-member jury will decide whether the tweet did not artificially inflate Tesla’s stock price by playing up the financials for the deal, and if so, by how much.
The defendants include current and former Tesla executives who Spiro said had “pure” motives in response to Musk’s plan.
By Tom Hals Wilmington, Del. and reporting by Jody Godoy in San Francisco; Edited by Noeleen Walder, Peter Henderson, Matthew Lewis and Daniel Wallis
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