A US jury found Elon Musk liable for defrauding Twitter shareholders, with potential damages reaching billions of dollars over his 2022 takeover.
SAN FRANCISCO: A US federal jury found Elon Musk liable for defrauding Twitter shareholders on Friday. The civil trial centred on claims the billionaire tried to artificially depress the company’s stock price to renegotiate or abandon his USD 44 billion takeover in 2022.
Jurors concluded Musk made two fraudulent statements regarding fake accounts, or bots, on the platform. One statement declared the purchase was “temporarily on hold” pending bot verification, while another suggested spam accounts could be “much” higher than 20%.
Shareholders’ lawyer Francis Bottini estimated damages could total around USD 2.5 billion. “Musk’s status as the world’s richest man is not a free pass,” Bottini said in a statement.
“If you’re able to move markets with your tweets you’re responsible for the harm you cause to investors.”
Musk’s legal team at Quinn Emanuel Urquhart & Sullivan called the verdict “a bump in the road.” The lawyers stated they “look forward to vindication on appeal.”
The jury did not find shareholders proved a separate claim of an overarching scheme to defraud. Musk’s lawyer, Michael Lifrak, argued his client’s concern about bots was genuine and not evidence of fraudulent intent.
The lawsuit covers investors who sold Twitter shares between May 13 and October 4, 2022. Musk ultimately completed the acquisition in October 2022 and later renamed the company X.
This verdict adds to Musk’s history of high-profile legal battles with shareholders. He previously won a 2023 trial over his “funding secured” Tesla tweet and litigation concerning his Tesla pay package.
Musk is separately in talks to settle a US Securities and Exchange Commission lawsuit. That case accuses him of delaying disclosure of his initial Twitter stock purchases in 2022.
In a related corporate move, SpaceX purchased Musk’s artificial intelligence firm xAI in February. That transaction created the world’s most valuable private company, valued at approximately USD 1.25 trillion.
The Sun Malaysia
