Musk is being sued by Tesla shareholders who claim he tweeted in 2018 about taking the business private, and they are seeking a federal court to restrict him from discussing the issue. Musk’s tweets that he had “funding secured” to take Tesla, private, were false, according to court documents filed by stockholders of the Austin, Texas-based company. The judge in the case ruled that Musk’s comments violated a 2018 court settlement with US securities regulators in which Musk and Tesla each agreed to pay $20 million fines.
Asked about his plans to take Tesla, private, at the TED 2022 conference on Thursday, Musk claimed he has the money to do it in 2018. He referred to the SEC as a slur and claimed he only agreed to pay because he was persuaded by bankers that if he didn’t, Tesla would go bankrupt. Interview and legal action occurred only a few days after Tesla CEO Elon Musk made a contentious bid to buy Twitter for $43 billion, which equals $54.20 per share, in order to transform the firm into a private corporation.
A “poison pill” plan was approved by Twitter’s board on Friday, making it impossible for Musk to purchase the company’s stock. Lawyers for Tesla shareholders submitted court filings Friday alleging that Musk is attempting to influence possible jurors in the case against the company. They claim that Musk’s 2018 tweets about having the money to take Tesla private for $420 a share were designed to manipulate the stock price, costing shareholders money. Musk’s supporters disagree.
Lawyers now claim that Musk is attempting to influence potential jurors as the lawsuit nears trial. Jurors might be misled into believing that Musk did not intentionally misrepresent himself in his Aug. 7, 2018, tweets, the attorneys claimed. As one juror put it, “His current utterances on that matter are an unsubtle effort to exonerate himself in the court of public opinion.”
Restricting Musk from making additional public statements on the matter until after the trial was requested by the attorneys in San Francisco. According to Chen, Musk’s attorneys have till Wednesday to react.
According to an email from Musk’s lawyer, Alex Spiro, the plaintiffs’ attorneys are requesting a sizable settlement. “Nothing will ever erase the fact, which is that Elon Musk was contemplating taking Tesla private and could have done so,” he said. In the end, “all that’s left are random plaintiffs attorneys attempting to make a profit and others trying to stop that reality from coming to light, all to the harm of free expression,” he says.
Chen had previously determined that Musk’s tweets were inaccurate and misleading, and “no reasonable jury could infer differently,” according to the shareholders’ attorneys.
As of Sunday, Judge Chen’s order, issued on April 1, had not been entered into the public record. A lawyer representing the shareholders, Adam Apton, said it was sealed because it included data that Musk and Tesla claimed was secret. In an email, he said that the document would remain secret until the parties decide whether or not to keep it that way. According to Apton, “the points determined by the court are appropriately described in our request for TRO (temporary restraining order)”.
The Securities and Exchange Commission (SEC) filed a lawsuit against Tesla CEO Elon Musk after his tweets in 2018. The agreement was signed by Musk after he accepted the fine and signed the court papers. One of Musk’s obligations under the agreement is that he “will not behave in a manner that would refute, directly or indirectly, any accusation contained therein or give rise to a false impression that the complaint has factual substance.”
The deal states that if Musk breaches it, the SEC may seek the court to throw out the accord and reinstate the securities fraud charge. The SEC was contacted for comment through a message left on their voicemail Sunday. So far, Spiro has requested that a federal judge in Manhattan, on behalf of Musk, reject the accord. SEC is utilizing the agreement and “near-infinite resources” to stifle Musk’s speech, he claims. Spiro’s court pleadings allege that Musk signed the deal when Tesla was less mature and the SEC’s actions threatened its funding.