Musk found liable for defrauding Twitter shareholders

A federal jury in the United States has found Elon Musk liable for defrauding shareholders of the social media platform formerly known as Twitter during his $44 billion acquisition in 2022. The verdict, delivered in a San Francisco federal court, concludes a high-profile trial where investors accused the billionaire of intentionally manipulating the company's stock price. Shareholders argued that Musk made false claims regarding the prevalence of spam and bot accounts to create leverage for renegotiating the deal or abandoning it entirely. During the proceedings, legal representatives for the shareholders highlighted a specific social media post from May 2022, in which Musk stated the takeover could not proceed until the company proved its bot count was under 5%. > He trashed the company. Trashed the executives. And tanked the stock, the shareholders lawyer, Mark Molumphy, said during his closing argument on Tuesday. In contrast, the defense maintained that Musk's concerns regarding the platform's integrity were genuine. > Michael Lifrak, a lawyer for Musk, countered that the billionaires concern about bots was real, and that speaking out about the problem did not show Musk committed or intended to commit fraud. Musk eventually completed the purchase in October 2022, subsequently rebranding the service as X. The platform was later integrated into his aerospace firm, SpaceX, which recently saw its valuation climb to approximately $1.25 trillion following the acquisition of his artificial intelligence venture, xAI. This liability finding marks a departure from Musk's previous legal victories in similar shareholder disputes. He previously successfully defended himself in a 2023 trial involving Tesla, Inc. regarding claims of "funding secured" for a private buyout, as well as a challenge to his multi-billion dollar compensation package in Delaware. While the jury has established liability, the specific amount of damages Musk must pay to the affected investors will be determined at a later date. The class-action lawsuit represents investors who sold their shares between May 13 and October 4, 2022, during the period of alleged price depression. Musk is also reportedly in discussions to settle a separate civil lawsuit with regulators regarding the timing of his initial stock disclosures.