Elon Musk being sued over his 'funding secured' tweet

Twitter CEO Elon Musk is facing a lawsuit over a fouryearold tweet in which he said Tesla shareholders funding was secured reported CNN Musk Tesla and other Tesla directors are facing a shareholder lawsuit over his nowinfamous 2018 tweet in which he said was thinking about taking Tesla private at a price of USD 420 a share If he had ended the tweet right there there wouldnt still be coverage of it or a lawsuit that seeks unspecified damagesBut he concluded it with two words that have resulted in Elon Musk having to pay millions of dollars in fines and legal fees Funding secured It turned out that while Musk had spoken to executives of the Saudi sovereign wealth fund about the money he would need to take Tesla private the funding was anything but secured reported CNNTeslas shareholders claim they were defrauded by Musks 2018 statement that funding was secured to take the electric car maker private The lawsuit seeks damages for shareholders who bought or sold Tesla stock in the days after Musks tweets on August 7 2018 The companys shares shot higher and then fell again after August 17 2018Also read Elon Musk asks Twitter managers to approve remote work at their own riskTesla shares initially climbed 11 per cent on the day of on his original tweet but they never reached that promised USD 420 level reaching a high that day of USD 38746 And they soon fell well below their pretweet price of USD 344 hitting USD 26324 a month later as it became clear that the funding was less than secure prompting the shareholder suit that is just now reaching trial after more than four years reported CNNMusks tweet also prompted a civil suit by the Securities and Exchange Commission the federal agency charged with protecting investors by requiring executives to tell the truth It initially sought to strip him of his position as Teslas CEO It eventually reached a settlement with Musk in which he and Tesla each agreed to pay USD 20 million in fines and Musk gave up his title as chairman of the company but retained the CEO title It also required that any tweet he sent out with material information about Tesla be reviewed in advance by other company executivesMusk later said he only agreed to the settlement because continuing to fight would have resulted in banks cutting off the funding that Tesla needed to survive which was then losing money and facing a cash crunch In comments at a TED conference last year he compared the negotiations with the SEC as comparable to someone pointing a gun to his childs headBut despite his claims to have funding secured Federal Judge Edward Chen who is hearing the case that starts Tuesday said in a ruling last April that no reasonable jury could find Musks tweets on August 7 2018 accurate or not misleading and rejected Musk and other defendants request to have the case dismissed before trial reported CNN Last week Chen also ruled against a motion by Musk and other defendants to have the case moved to Texas where Teslas headquarters are now based rather than in San FranciscoThey had argued that media attention about Musk and his purchase of Twitter made it impossible to find an unbiased jury in the San Francisco Bay area particularly its coverage of his layoffs at Twitter since completing the purchase and his views on allowing tweets which might have previously been banned for spreading misinformation This is only the latest court case involving Musk He is still awaiting a decision in a bench trial in a separate shareholder case held in Delaware state court challenging the compensation package he received from Tesla that made him the richest person on the planet until the recent decline in the companys stock price reported CNNThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever