The judge finds that “there was nothing concrete” about Saudi financing to privatize the electric car maker.
A US court ruled that Elon Musk’s 2018 tweets saying he had secured funding to take Tesla private were inaccurate and reckless, handing a major victory to investors who claimed the billionaire artificially inflated prices. of actions.
US District Judge Edward Chen of San Francisco concluded that there was “nothing concrete” about the financing of Saudi Arabia’s sovereign wealth fund at the time.
Musk in 2018 met with representatives of the Saudi Arabian Public Investment Fund and discussed privatizing Tesla, but the evidence shows “there was nothing concrete about the funding coming from the PIF,” the judge wrote.
“Rather, the discussions between Tesla and the PIF were clearly in the preliminary stage.
“No reasonable jury could find that Mr. Musk did not act recklessly given his clear knowledge of the discussions,” it said.
Chen said details such as the total amount of funds needed to take Tesla private or the price to be paid for Tesla shares were not discussed.
The summary judgment, issued on April 1, was sealed for more than a month before it was made public on Tuesday.
“It’s hugely significant,” shareholder attorney Nicholas Porritt, a partner at Levi & Korsinsky LLP, told Reuters.
He said it’s rare for class action plaintiffs to get summary judgment for falsehood and scienter, referring to statements that are knowingly or recklessly false, before going to a jury trial.
The remaining issue is what harm the intentionally false statement has caused shareholders, he said.
The judge refused to grant shareholders summary judgment on the question of whether or not the allegedly false statements actually affected Tesla’s stock prices.
Musk’s attorney, who filed motions to vacate the court decision, was not immediately available for comment. Musk recently said that he actually secured the funding to take Tesla private in 2018.
The latest ruling was in line with a complaint from the US securities regulator that sued Musk for securities fraud over tweets in 2018. Musk settled with the US Securities and Exchange Commission, resigned as chairman of Tesla, paid fines and agreed to have some of his tweets approved by a lawyer before posting them.