The legal process, which is taking place in San Francisco, California, is the result of a class action lawsuit that was filed by shareholders of electric vehicle maker in which they ensure that Musk manipulated the market with his messagewhich caused strong movements in the company’s price that cost them large amounts of money.
The tweet in question was written by the new owner of Twitter on August 7, 2018, in which Musk said that had raised the credits to pay for the acquisition of Tesla for 72,000 million dollars, and then issued a statement that gave the possibility to believe that the agreement was imminent.
However, this transaction never materialized, so Musk must now explain his actions under oath in federal court in San Francisco.
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As a result of Musk’s tweets at the time, they sparked a Tesla stock price rise, which ended abruptly a week later, when it became clear that he did not have the funds for the purchase. As a result, he gave up his plan take the car off the stock market and the $40 million payment to financial market regulatorswho forced him to resign from the presidency of the company.
Previously in 2018, Musk was accused by the United States Securities and Exchange Commission (SEC) of fraud due to his publication on Twitter and the businessman accepted a fine of 20 million dollars as a sanction plus leave for at least three years as president of the board of directors of the companyhowever, he continued to be its CEO.
Tesla CEO Elon Musk at the “Cyber Rodeo” grand opening celebration of the new Tesla Giga Texas manufacturing plant in Austin, Texas.
For its part, in the SEC complaint it accused Musk of simulated saying that he had the possibility of delisting Tesla from the stock market having made surea multi-million dollar transaction” and only in the absence of a shareholder vote.
“The reality and the truth is that Musk had not even discussed, let alone confirmed, the key terms of the deal with any potential funding source.”, the SEC document from that time specified. “Musk’s false and misleading public statements caused confusion and significant disruption to Tesla’s stock market, and resulted in investor damage”, the document continues.
In his defense, Musk has reiterated that he did have an agreement with the Saudi sovereign wealth fund to support his plan to take the company private taking his shares at a value of 420 dollars, which would have been valued at about 72,000 million dollars.
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The trial that begins today will be decided by a jury and the result of this will depend on the interpretation made by the jury of the process against Musk for the publication of said tweets; same that federal judge Edward Chen has already ruled that they are liars.
Likewise, Musk suffered a setback last Friday when Chen rejected his request to transfer the trial to a federal court in Texas. Musk argued that the Negative media coverage of the purchase Twitter tainted the list of potential jurors in San Francisco.
In the opinion of Musk’s lawyers, in San Francisco he will not be able to carry out a fair trial given the “local negativity” that exists in that area against the American magnate, especially after the purchase of Twitter and his decision to fire thousands of employees of that company, which is based in the city.
With information from the EFE Agencies and The Associated Press.
