Elon Musk: Tesla shareholders are silent in the fraud case

DETROIT – A group of Tesla shareholders suing CEO Elon Musk over several 2018 tweets about the company being private is asking a federal judge to order Musk to stop commenting on the case.

Attorneys for those who own stock in the Austin, Texas-based company also said in court documents that the judge in the case ruled that Musk’s tweets were about “securing funding.” ‘ to take Tesla private is wrong, and his comments also violate a 2018 court settlement with US securities regulators in which Musk and Tesla each agreed to pay $20 million. fine.

Musk, in an interview Thursday at the TED 2022 conference, said he has enough money to take Tesla private in 2018. He called the Securities and Exchange Commission an obscene name and said he only settled because bankers told him they would stop providing capital if he didn’t, and Tesla would go bankrupt.

The interview and court case comes just days after Musk, the world’s richest man, made a controversial offer to take over Twitter and turn it into a private company with an offer worth $43 billion or $54.20 per share. Twitter’s board of directors on Friday approved a “poison” strategy that would make it very expensive for Musk to buy stocks.

In court documents filed Friday, attorneys for Tesla shareholders allege that Musk is trying to influence potential jurors in the case. They argue that Musk’s 2018 tweets about having the money to take Tesla private at $420 per share were written with the aim of increasing the stock price, costing shareholders money.

Now, lawyers say Musk is campaigning to influence jurors as the case approaches trial.

The lawyers wrote: “Musk’s comments risk confusing potential jurors with the false story that he did not knowingly misrepresent the facts with his tweets on August 7th. year 2018”. “His current statements in that regard, an uncompromising attempt to exonerate himself in the courts of public opinion, will only have a predetermined effect on the jury.”

The lawyers asked Judge Edward M. Chen of San Francisco to restrict Musk from making public comment on the matter until after the trial. Chen gave Musk’s lawyers until Wednesday to respond.

Alex Spiro, an attorney representing Musk, wrote in an email Sunday that the plaintiffs’ attorneys were seeking a large sum of money. “Nothing will change the fact that Elon Musk is considering making Tesla private and possible,” he wrote. “All that remains half a decade later is random plaintiffs’ attorneys trying to make money and others trying to prevent that fact from coming to light, all to the detriment of rights. freedom of speech.”

But the shareholders’ attorney wrote that Chen ruled that Musk’s tweets were untrue and misleading, and that “no reasonable jury can conclude to the contrary.”

Judge Chen’s order, issued April 1, was not in public court records as of Sunday. Adam Apton, an attorney for the shareholders, said it was sealed because of evidence that Musk and Tesla said was confidential. It will remain sealed until the parties agree if anything should be sealed, he wrote in an email. “Our proposal for the TRO (temporary injunction) accurately describes the issues decided by the court,” Apton wrote.

Following Musk’s 2018 tweets, the SEC filed a complaint against him alleging violations of securities laws. Musk later agreed to the fine and signed the court settlement. Part of the agreement states that Musk “will not take any action or make or permit the making of any public statement denying, directly or indirectly, any of the allegations in the complaint.” claim or give the impression that the claim has no basis in fact.”

If Musk violates the agreement, the SEC can ask the court to rescind it and reinstate the securities fraud complaint, the settlement said. A message was left on Sunday seeking comment from the SEC.

Spiro, on behalf of Musk, asked the Manhattan federal court to cancel the agreement. He argued that the SEC is using the treaty and “almost limitless resources” to chill Musk’s speech. Court documents filed by Spiro say Musk signed the agreement when Tesla was an immature company and that the SEC’s actions jeopardized their finances.

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