Elon Musk is on trial this week for potential fraud after tweeting in 2018 that he was poised to take Tesla private. In a federal courtroom in San Francisco, where Tesla CEO Musk was scheduled to be one of those summoned to testify, the selection of jurors who would evaluate the evidence began. The episode started in August 2018 when Musk tweeted that he had the funds to take Tesla private, sparking a wild rise in the price of the company’s stock.
Stockholders sued Musk for allegedly costing them billions of dollars with the tweet that said finance was “secured” to buy out the company’s shareholders.
“The plaintiff alleges that these tweets were materially false and artificially affected the price of Tesla stock and other securities after they were made,” US District Court Judge Edward Chen said while summarizing the case for potential jurors.
The Tesla tycoon’s attorneys, according to Chen, will contend that any attempts to prove that Musk’s tweet was “materially” false or that shareholders experienced damage as a result would fail at trial.
Last week, Chen rejected Musk’s request to move the proceedings to Texas, the southern state where Musk relocated Tesla’s headquarters.
The multibillionaire, who purchased Twitter in late October and has been under harsh fire for his actions since assuming control of the social media company, was denied a fair trial, according to the defence attorneys, in San Francisco.
Musk radically changed the site’s content moderation procedures after assuming control of Twitter, firing more than half of the 7,500 workers.
In 2018, Musk sent a brief tweet that caught the attention of law enforcement.
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The Securities and Exchange Commission, which oversees the US stock market, imposed a $20 million fine and forced Musk to resign as Tesla’s board chairman.
The SEC case, however, was prohibited from being discussed at the fraud trial owing to worries that it might sway the jury, according to media sources.
(With inputs from agencies)
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