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Elon Musk 'not guilty' of fraud after Tesla sale tweet

Elon Musk leaves court - Bloomberg
Elon Musk leaves court - Bloomberg

Elon Musk has been cleared of liability for investors' losses in a fraud trial over his 2018 tweets falsely claiming that he had secured funding for a private buyout of Tesla.

The tweets sent the Tesla share price on a rollercoaster ride, and Mr Musk was sued by shareholders who said the tycoon acted recklessly in an effort to squeeze investors who had bet against the company.

On Friday night, jurors deliberated for barely two hours before returning to the San Francisco courtroom to say they unanimously agreed that neither Mr Musk nor the Tesla board perpetrated fraud with the tweets and in their aftermath.

"Thank goodness, the wisdom of the people has prevailed!" Mr Musk wrote on Twitter.

"I am deeply appreciative of the jury's unanimous finding of innocence in the Tesla 420 take-private case."

The billionaire had previously tried but failed to get the trial moved to Texas on the grounds jurors in California would be biased against him.

A sketch of Elon Musk during the federal court proceedings - AP
A sketch of Elon Musk during the federal court proceedings - AP

Attorney Nicholas Porritt, who represents Glen Littleton and other investors in Tesla, had argued in court that the case was about making sure the rich and powerful have to abide by the same stock market rules as everyone else.

"Elon Musk published tweets that were false with reckless disregard as to their truth,"Mr  Porritt told the panel of nine jurors during closing arguments.

He pointed to expert testimony estimating that Mr Musk's claim about funding, which turned out not to be true, cost investors billions of dollars overall and that Musk and the Tesla board should be made to pay damages.

Defending Mr Musk, attorney Alex Spiro successfully countered that the billionaire may have erred on wording in a hasty tweet, but that he did not set out to deceive anyone.

Mr Spiro also portrayed the mercurial entrepreneur, who now owns Twitter, as having had a troubled childhood and having come to the United States as a poor youth chasing dreams.

The case revolved around a pair of tweets in which Musk said "funding secured" for a project to buy out the publicly-traded electric automaker, then in a second tweet added that "investor support is confirmed".

"He wrote two words 'funding secured' that were technically inaccurate," Mr Spiro told the court.

"Whatever you think of him, this isn't a bad tweeter trial, it's a 'did they prove this man committed fraud?' trial."

Mr Musk said he fired off the tweets at issue after learning of a Financial Times story about a Saudi Arabian investment fund wanting to acquire a stake in Tesla.

The trial came at a sensitive time for Mr Musk, who has dominated the headlines for his chaotic takeover of Twitter where he has laid off more than half of the 7,500 employees and scaled down content moderation.