Elon Musk misled Tesla shareholders in 2018, took the company private while “funds were secured,” cost millions of dollars in damages, investor’s lawyers accused chief executive of securities fraud told the jury at trial.
“His lies cost ordinary people like Glenn Littleton millions of dollars,” attorney Nicholas Porritt said in opening arguments Wednesday, referring to class action plaintiffs. “It’s important that he is arrested and the company held accountable,” Politt said, in order for the company to operate properly and fairly.
Musk’s lead attorney, Alex Spiro, said in an address to the jury that Musk’s intention to keep Tesla private was “absolutely true” and that the Twitter message was “substantially unimportant to the market. ‘ he countered.
Spiro said fundraising to take Tesla private was not an issue, explaining that Musk was “serious” about taking the company private but used “the wrong words.” He said the only real obstacle is getting shareholder approval for a deal structure that protects Tesla shareholders.
The duel argument set the stage for a two-week trial in San Francisco federal court that will test the billionaire entrepreneur’s credibility.
As a star witness, Musk is expected to testify that his short-term plans to take Tesla private have been solid based on discussions with the Saudi Sovereign Wealth Fund. It summoned the governor of the kingdom’s private investment fund to testify at the trial, but withdrew the request after Yasir al-Rumayyan’s lawyers argued he was legally obliged to appear.
Porritt notes that Musk didn’t actually go through what was supposed to be a $60 billion deal, and that the first tweet about taking Tesla private on August 7, 2018 at $420 a share was Tesla’s was sent without prior notice to the board of directors of
Plaintiffs’ attorneys said Tesla’s stock price “exploded” after the tweet and investor reaction halted trading, and showed jurors the chart spike. published an Aug. 16 article containing an interview with Musk and confirmed the tweet was empty, the lawyer said, adding that the Take Private plan was publicly withdrawn. By Mask on August 23rd.
Spiro defended Musk’s actions, stating that “the inaccuracy and ambiguity of the tweets were not a problem for the market. He was actively pursuing Twitter private.”
“This was not a scam, nor even close to it,” he said.
A lawyer for the CEO told jurors that by August 7, Musk had spoken to investors in Michael Dell, Silver Lake Management and Goldman Sachs Group. “Mr. Musk was doing his homework,” said Spiro, who said during the conversation that while the structure of the deal to take Tesla private may have been unique, funding was not the issue. Told.
Spiro said the Saudi investment fund had heard nothing about his intentions. “He didn’t have to talk to them,” he said. News that Saudi Arabia had acquired a major stake in Tesla appeared in his Times Financial on the morning of Aug. 7, he said, adding that Musk’s tweet was a reaction to the news.
Spiro called the tweet about what Musk was thinking a “thought bubble” and said it was an effort to spread the “state of play” to the world. knows it.”
Spiro said the tweet contained “technical inaccuracies,” but Musk is concerned that some investors know about his plans to go private, and he wanted to “protect” and “daily shareholder” information.
The lawsuit, a rare securities class action trial, sees Musk and his company defying the norm of resolving claims that clear high legal hurdles, and Musk himself is expected to stand up as early as this week. It could be a dramatic trial.
A nine-member jury will decide whether, and if so, how much, the tweet artificially inflated Tesla’s stock price by highlighting the deal’s financing.
U.S. District Judge Edward Chen, who is overseeing the trial, ruled that Musk’s statements about the circumstances of the deal were false and that Musk acted recklessly.
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