A federal judge in the United States says Tesla must face a lawsuit claiming that chief executive Elon Musk misled shareholders when he tweeted in August 2018 that he had the funding secured to take the automaker private at $420.

A Reuters report says that U.S. District Judge Edward Chen ruled on Wednesday that shareholders can try and prove Musk intended to defraud them with the tweet and subsequent follow-up statements. Additionally, the judge said shareholders can try to prove the tweet was the “proximate cause” of volatility in Tesla’s stock price that caused billions of dollars of losses.

Read More: Tweet This – Lawsuit Claims Elon Musk Manipulated Tesla’s Stock Price, Misled Investors

Shortly after Musk claimed he had the “funding secured” to take Tesla private in a tweet on August 7, 2018, the company’s stock price jumped by 13 per cent above the prior day’s close. While share prices soon gave up those gains and actually dropped to below where they were before the tweet by August 17, some investors claim it was a plot to squeeze short-sellers.

“Musk’s tweets were an ill-conceived attempt to manipulate the stock price of Tesla upward in order to burn investors who had sold Tesla stock short,” the lawsuit claims, and, “had the desired effect of creating a massive one-day increase in the price of Tesla stock and causing short sellers large losses.”

Soon after Musk made his tweet, the Securities and Exchange Commission went after him and reached a $40 million settlement requiring Elon Musk to pay a $20 million fine, Tesla to pay a $20 million fine, and for Musk to step down as chairman of the carmaker’s board. Tesla was also required to appoint a committee to oversee Musk’s communications.