A  U.S. federal jury in San Francisco has found Elon Musk liable for defrauding Twitter shareholders during his $44 billion acquisition attempt of the social media platform in 2022. This verdict was delivered on Friday after a closely monitored civil trial where Musk faced accusations of manipulating Twitter’s stock price through misleading statements on social media.

Allegations of Misleading Statements

The jury concluded that Musk’s claims about Twitter’s underreporting of fake and spam accounts, known as bots, amounted to fraud. Two specific statements were highlighted during the trial. In one claim, Musk stated that the acquisition was “temporarily on hold” until Twitter confirmed that bots constituted less than 5% of its users. In another, he suggested that the proportion of bots could be “much” higher than 20%, which conditioned the takeover on proof from Twitter’s CEO regarding the account percentage.

Potential Damages and Reactions

While the exact amount of damages has yet to be determined, legal representatives for the shareholders estimated that it could reach approximately $2.5 billion. Francis Bottini, who represented the shareholders, emphasized that Musk’s wealth does not exempt him from accountability, stating that he is responsible for any market impact resulting from his online activity. In contrast, Musk’s legal team expressed disappointment with the verdict, referring to it as merely a “bump in the road” and expressing anticipation for a potential appeal.

Background of the Legal Dispute

The civil trial commenced on March 2, with jurors starting their deliberations on Tuesday. Musk has a history of engaging in legal battles with shareholders rather than opting for settlements. This pattern includes a 2023 San Francisco trial concerning claims that he misled Tesla investors by stating in 2018 that he had “funding secured” to take the electric vehicle manufacturer private, where he was ultimately victorious in court. Additionally, he is facing litigation concerning his $139 billion pay package from Tesla.

Status of the Twitter Acquisition

Despite the legal issues surrounding his acquisition, Musk successfully completed the purchase of Twitter in October 2022, subsequently rebranding the platform as X. This transformation included significant changes in the company’s operational approach and strategic direction.

Claims Regarding Market Manipulation

The lawsuit focused on allegations from investors who claimed they sold Twitter shares at inflated prices which Musk had artificially depressed between mid-May and early October 2022. Musk’s attorney, Michael Lifrak, defended his client by asserting that Musk’s concerns regarding bots were legitimate and did not constitute fraudulent intent.

Separate SEC Investigations

Musk is also in discussions to resolve a separate civil lawsuit initiated by the U.S. Securities and Exchange Commission. This lawsuit alleges that he delayed disclosing his initial Twitter stock purchases in 2022 in an effort to buy shares at lower prices before the market became aware of his actions. Additionally, in February, his aerospace company SpaceX completed the acquisition of his artificial intelligence firm, xAI, further extending Musk’s influence in the technology sector.

Long or Short, get news the way you like. No ads. No redirections. Download Newspin and Stay Alert, The CSR Journal Mobile app, for fast, crisp, clean updates!

App Store –  https://apps.apple.com/in/app/newspin/id6746449540 

Google Play Store – https://play.google.com/store/apps/details?id=com.inventifweb.newspin&pcampaignid=web_share