A federal judge has ruled that Tesla CEO Elon Musk’s 2018 tweets about having secured financing to take the company private were false, according to court filings by Tesla investors suing the billionaire over the tweets.
The filing said that the court ruled April 1 that Musk’s 2018 tweets were “false and misleading.” The court “held that he recklessly made the statements with knowledge as to their falsity,” it said.
Investors in the electric car maker asked in the filing, submitted on Friday, for U.S. District Court Judge Edward Chen to block the celebrity entrepreneur from his “public campaign to present a contradictory and false narrative regarding” his 2018 tweets.
Musk on Thursday stepped up criticism of the U.S. securities regulator for bringing fraud charges against him over his 2018 tweets regarding taking Tesla private.
He claimed that funding to take Tesla private was actually secured at the time he posted his tweets, but the Securities and Exchange Commission (SEC) “pursued the active public investigation nonetheless.”
“So I was forced to concede to the SEC unlawfully,” Musk told the audience at a TED conference in Vancouver.
Musk said he felt forced to settle with the SEC because banks threatened to cease providing capital if he did not do so, which would have bankrupted Tesla on the spot.
“So that’s like having a gun to your child’s head,” Musk said.
“I was forced to admit that I lied to save Tesla’s life, and that’s the only reason,” Musk added.
Musk and Tesla each paid $20 million in civil fines and Musk stepped down as Tesla’s chairman to resolve SEC claims that Musk defrauded investors on Aug. 7, 2018, by posting on Twitter that he had “funding secured” to take the company private. The SEC said at the time his funding tweets “lacked an adequate basis in fact.”
A related consent decree also required Musk to obtain pre-clearance from Tesla lawyers for tweets and other public statements that could be material to Tesla.
That April 1 decision was not listed on the court docket.
The issues will be at the center of a May jury trial in which the investors are seeking damages over the tweets.
Musk “has used his fame and notoriety to sway public opinion in his favor, waging battle in the press having been defeated in the courtroom,” the filing said.
Musk’s latest comments risk confusing potential jurors and prejudicing a jury decision on the amount of damages owed by Musk, it said.
Alex Spiro, a lawyer for Musk and Tesla, on Saturday again asserted that it was true that Musk was considering taking Tesla private in 2018 and had financing for that move. “All that’s left some half decade later is random plaintiffs’ lawyers trying to make a buck and others trying to block that truth from coming to light, all to the detriment of free speech,” he said.
The case is In re Tesla Inc. Securities Litigation, U.S. District Court, Northern District of California, No. 18-04865.
