Elon Musk to stand trial over Tesla’s ‘secured funding’ in 2018

Billionaire Elon Musk will again appear in court this week for a lawsuit with abandoned Tesla shareholders who claim his infamous 2018 “secured funding” tweet cost them a fortune.

The class action lawsuit begins Tuesday with jury selection in San Francisco federal court. Musk is expected to serve as a key witness during the trial.

Tesla shareholders are seeking unspecified financial damages. The plaintiffs allege that Musk caused billions in losses in an August 7, 2018 tweet in which he claimed that funding was “secured” to privatize Tesla at a price of $420 per share. The proposed deal never took place.

Musk is already at a disadvantage in court. Circuit Court Judge Edward Chen, who presides over the case, ruled last April that Musk’s tweet and other posts on the subject were “false and misleading” and that the billionaire acted “recklessly given his clear knowledge of the discussions.”

Chen also determined that there was “nothing specific” to support Musk’s claims that he secured an agreement with the Saudi Arabian Public Investment Fund at the time. Musk denies wrongdoing and claims he was in real talks with potential investors about a deal with private companies.

The jury will assess whether Musk’s actions caused direct financial damage, potentially putting the Tesla CEO on the hook for a large payout to injured shareholders.

Last week, Chen thwarted an attempt by Musk’s lawyers to move the site of the trial from San Francisco to a federal courthouse in Texas.

Musk’s team argued that the city’s potential jury pool was biased by the polarizing backlash to its $44 billion takeover of Twitter, which is headquartered in San Francisco.

Lawyers for Tesla shareholders opposed the transfer request, arguing that Musk was a “celebrity” whose actions draw scrutiny regardless of venue.

“For better or worse, Musk is a celebrity who gets media attention around the world,” lawyers for the shareholders said in the lawsuit. “Partly to blame is his Twitter footprint. If “negative” attention were all that was required to disqualify a pool of jurors, Musk would effectively be unable to be tried in front of a jury given his knack for attracting “negative” coverage.”

Jury candidates had to answer a variety of questions about their views on Musk, including whether they own Tesla cars.

Musk’s tweet in 2018 drew scrutiny from the Securities and Exchange Commission, which ended up hitting the billionaire and Tesla with $20 million in separate finds. Musk also had to issue a consent decree requiring his tweets and other public communications to be pre-approved by the company’s lawyers.

Musk has since claimed he was pressured into agreeing to the SEC settlement. In a separate legal battle, the billionaire asked the judge to overrule the consent order.

With mail wires