Musk faces trial for stock fraud for a 2018 tweet about Tesla

New York, Jan 16 – Elon Musk will face a trial starting Tuesday for alleged stock fraud in relation to a tweet published in 2018 in which he said that he was considering removing Tesla from the stock market.

The process, which is taking place in San Francisco (California, USA), is the result of a class action lawsuit filed by shareholders of the electric vehicle manufacturer who claim that Musk manipulated the market with his message, causing strong movements in the listing of the company that cost them large amounts of money.
Already in 2018, Musk was accused by the US Securities and Exchange Commission (SEC) of fraud for his publication on Twitter and the businessman accepted as a sanction a fine of 20 million dollars and leave for at least three years as chairman of the company’s board of directors, although he continued to be its CEO.

In its complaint, the SEC accused Musk of falsely saying that he had the ability to delist Tesla by securing “a multi-million dollar transaction” and only lacking a shareholder vote.

“The reality and the truth is that Musk had not even discussed, let alone confirmed, the key terms of the agreement with any potential funding source,” the SEC filing stated.
“Musk’s false and misleading public statements caused confusion and significant disruption to Tesla’s stock in the marketplace, and resulted in damage to investors,” he added.

Musk, for his part, has insisted that he did have an agreement with the Saudi sovereign fund to support his plan to take the company off the stock market by acquiring its shares at a price of $420, which would have valued it at around $72 billion. of dollars.
The trial that begins this Tuesday will be decided by a jury and, recently, the defense of the billionaire businessman tried unsuccessfully to transfer him from California to Texas.

According to Musk’s lawyers, there cannot be a fair trial in San Francisco given the “local negativity” that exists in that area against the tycoon, particularly after his purchase of Twitter and his decision to fire thousands of employees of that company, which is based in the city.
His arguments, however, were rejected by the judge and the process will take place as scheduled in the Californian city, on the outskirts of which Tesla had its headquarters until Musk moved it to Texas.

Melissa Galbraith
Melissa Galbraith is the World News reporter for Globe Live Media. She covers all the major events happening around the World. From Europe to Americas, from Asia to Antarctica, Melissa covers it all. Never miss another Major World Event by bookmarking her author page right here.