Tesla and Musk win class-action lawsuit over privatization

[Silicon Valley = Takeshi Shiraishi] A jury on the 3rd became defendants in a class action lawsuit filed by some shareholders in a federal district court in California over Tesla’s plans to go private in 2018. The verdict dismissed plaintiffs’ claims that the company and CEO Elon Musk violated federal securities laws. In the first trial, Mr. Musk won the case.

In a class-action lawsuit filed in 2018 by Tesla shareholders in U.S. District Court for the Northern District of California, Musk tweeted that he had “funded” when he announced plans to take the company private. The issue was whether it had harmed the investors.

According to US media, a nine-member jury found that the plaintiffs had failed to prove that Musk’s tweets had harmed them. Mr. Musk’s side has argued in previous hearings that there is no causal relationship between posts on Twitter and stock prices.

Mr. Musk posted on his Twitter account after the jury’s verdict on the 3rd, “Good, people’s wisdom won!” He also “deeply appreciates the jury’s unanimous acquittal,” he wrote.

Lawyers for both the plaintiffs and the defendants have not responded to requests for comment. A lawyer for the plaintiffs told CNBC television that he was “disappointed with the verdict and is considering next steps,” suggesting that he intends to appeal.

The federal district court for the Northern District of California is near the headquarters of Twitter, which Musk bought in late October 2022. He said local media continued to report negatively about him in connection with the Twitter acquisition. He filed a motion to move the court to a different state, arguing that a jury selected from within the district would not be able to give a fair trial, but was denied.

The U.S. Securities and Exchange Commission (SEC) also said that Musk “didn’t even negotiate with potential funding sources” for Tesla’s plans to go private, which he announced in 2018 and then withdrew in less than three weeks. A lawsuit was filed on suspicion of securities fraud. In the trial with the SEC, Tesla and Mr. Musk settled by paying each of them $ 20 million (about 2.2 billion yen at the exchange rate at the time)

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