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This can't bode well for Musk in his bid for twitter...
In a court filing out late Friday, shareholders who are suing Tesla and CEO Elon Musk over alleged securities fraud said they won part of a critical ruling in their class-action lawsuit.
The shareholders are suing Tesla over money they lost after Musk tweeted in 2018 that he was considering taking his electric vehicle company private at $420 per share and said he had funding secured to do so.
Tesla’s stock trading initially halted, then shares were highly volatile for weeks after the tweets. Musk later said that he had been in discussions with Saudi Arabia’s sovereign wealth fund and felt confident that funding would come through at his proposed price. A deal never materialized.
The Securities and Exchange Commission investigated and charged Musk with civil securities fraud as a result of those tweets. Tesla and Musk struck a revised settlement agreement in 2019 over those charges, but Musk is trying to terminate that agreement now.
Damages from the shareholders’ class-action lawsuit could amount to billions of dollars that would be paid by Musk and Tesla to those who are members of the class.
The shareholders’ attorneys said in the filing out Friday that Judge Edward M. Chen, who is presiding in this matter, had concluded that Musk acted with scienter — in other words, that he knowingly made false statements about having funding secured when he tweeted.
www.cnbc.com
In a court filing out late Friday, shareholders who are suing Tesla and CEO Elon Musk over alleged securities fraud said they won part of a critical ruling in their class-action lawsuit.
The shareholders are suing Tesla over money they lost after Musk tweeted in 2018 that he was considering taking his electric vehicle company private at $420 per share and said he had funding secured to do so.
Tesla’s stock trading initially halted, then shares were highly volatile for weeks after the tweets. Musk later said that he had been in discussions with Saudi Arabia’s sovereign wealth fund and felt confident that funding would come through at his proposed price. A deal never materialized.
The Securities and Exchange Commission investigated and charged Musk with civil securities fraud as a result of those tweets. Tesla and Musk struck a revised settlement agreement in 2019 over those charges, but Musk is trying to terminate that agreement now.
Damages from the shareholders’ class-action lawsuit could amount to billions of dollars that would be paid by Musk and Tesla to those who are members of the class.
The shareholders’ attorneys said in the filing out Friday that Judge Edward M. Chen, who is presiding in this matter, had concluded that Musk acted with scienter — in other words, that he knowingly made false statements about having funding secured when he tweeted.
Elon Musk's tweets about taking Tesla private were false, new court filing says
A court filing out Friday suggests a judge ruled that CEO Elon Musk knowingly made false statements when he tweeted about a take-private deal for Tesla in 2018.
