Elon Musk and Tesla were found not liable by a jury in a San Francisco federal court on Friday in a class-action securities fraud trial stemming from tweets Musk made in 2018.
The Tesla, SpaceX and Twitter CEO was sued by Tesla shareholders over a series of tweets he wrote in August 2018 saying he had “funding secured” to take the automaker private for $420 per share, and that “investor support” for such a deal was “confirmed.”
Trading in Tesla was halted after his tweets, and its share price remained volatile for weeks.
Jurors deliberated for less than two hours before reading their verdict. “We are disappointed with the verdict and considering next steps,” said Nicholas Porritt, partner at Levi & Korsinsky, the firm representing the shareholders in the class action, in an email to CNBC.
“I am deeply appreciative of the jury’s unanimous finding,” Musk wrote on Twitter.
Musk’s lead counsel, Alex Spiro of Quinn Emanuel Urquhart & Sullivan, arguing before the jury earlier Friday, said the matter had to be assessed in context, noting the Tesla CEO was only considering taking the company private. He said fraud cannot be built on the back of a consideration.
Spiro did not immediately respond to requests for comment.
The shareholders in the certified class-action lawsuit included a mix of stock and options buyers who alleged that Musk’s tweets were reckless and false, and that relying on his statements to make decisions about when to buy or sell cost them significant amounts of money.
Musk later claimed that he had a verbal commitment from Saudi Arabia’s sovereign wealth fund, and that he thought funding would come through at his proposed price based on a handshake. However, the deal never materialized.
During the course of this trial, Musk also said he would have sold shares of SpaceX to finance a going-private deal for Tesla, as well as taking funds from the Saudi Public Investment Fund.