A federal judge has ruled that Tesla CEO Elon Musk’s now-infamous 2018 tweets about having secured funding at $420 per share were false and that he knew so.
Reuters reports that the tweets were “false and misleading,” according to court filings by Tesla investors suing Musk over them. The court further “held that he recklessly made the statements with knowledge as to their falsity.”
The investors are suing the CEO over the money they lost after the tweets sent the company’s stock into turmoil. Trading was initially halted and shares were highly volatile for weeks after. Damages from the shareholders’ class-action lawsuit could amount to billions of dollars that would have to be paid by Musk and Tesla, reports CNBC.
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The information was revealed in a filing the shareholders’ lawyers have made, seeking a temporary restraining order against Musk to prevent him from making further public statements about the tweets ahead of trial.
They claim that the CEO “has used his fame and notoriety to sway public opinion in his favor, waging battle in the press having been defeated in the courtroom.” They further argue that Musk’s actions risk confusing potential jurors and prejudicing a jury decision on the amount of damages owed by him.
Musk is attempting to nullify the agreement he made with the SEC in the wake of the tweets to ensure that any tweets he publishes regarding Tesla’s financials be looked over by Tesla lawyers.
The CEO’s lawyer claims that plaintiffs are trying to “make a buck” and prevent elements of the case from coming to light. The trial for this class action suit will start on May 31, in San Francisco federal court.
