Elon Musk sued by Tesla shareholders over 2018 ‘funding secured’ tweet

Billionaire Elon Musk is heading back to court this week for a legal clash with jilted Tesla shareholders who allege his infamous 2018 “funding secured” tweet cost them a fortune.

The trial over the class-action lawsuit began on Tuesday US time with jury selection in San Francisco federal court.

Musk is expected to take the stand as the star witness during the proceedings, the New York Post reports.

Tesla shareholders are seeking unspecified financial damages. The plaintiffs allege that Musk caused billions of dollars in losses with the August 7, 2018 tweet in which he claimed to have “funding secured” to take Tesla private at $US420 per share. The purported deal never materialised.

Musk is already at a disadvantage in the trial. District Court Judge Edward Chen, who is presiding over the case, ruled last April that Musk’s tweet and other posts on the subject were “false and misleading” and that the billionaire acted “recklessly given his clear knowledge of the discussions”.

Chen also determined that there was “nothing concrete” to back Musk’s claims that he had obtained an agreement with Saudi Arabia’s Public Investment Fund at the time. Musk has denied wrongdoing and argued that he engaged in real discussions with potential investors on the go-private deal.

Jurors will assess whether Musk’s actions directly caused financial harm, potentially putting the Tesla CEO on the hook for a major payout to impacted shareholders.

Last week, Chen shut down an effort by Musk’s lawyers to move the trial’s venue from San Francisco to a federal court in Texas.

Musk’s team asserted that the potential jury pool in the city was biased due to the polarising response of his $US44 billion takeover of Twitter, which is headquartered in San Francisco.

Lawyers for the Tesla shareholders had opposed the transfer request, asserting that Musk was a “celebrity” whose actions draw intense scrutiny regardless of venue.

“For better or worse, Musk is a celebrity who garners attention from the media around the globe,” the shareholders’ lawyers said in a court filing.

“His footprint on Twitter alone is partially to blame for that. If ‘negative’ attention was all that was required to disqualify a jury pool, Musk would effectively be untriable before a jury given his knack for attracting ‘negative’ coverage.”

Jury candidates were required to respond to a slew of questions about their views on Musk, including whether they owned Tesla vehicles.

Musk’s 2018 tweet triggered scrutiny from the US Securities and Exchange Commission (SEC), which eventually slapped the billionaire and Tesla with separate $US20 million finds. Musk was also required to enter a consent decree in which his tweets and other public communications had to be pre-approved by company lawyers.

Musk has since claimed he was forced to agree to the SEC settlement. In a separate legal battle, the billionaire has asked a judge to nix the consent decree.

This article originally appeared in the New York Post and has been republished with permission

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