Elon Musk wins lawsuit against SolarCity but fails to escape SEC ‘funding guarantee’ settlement

Elon Musk scored both wins and losses in separate court decisions on Wednesday, when a judge found the billionaire guilty of misconduct related to Tesla’s $2.6 billion acquisition of SolarCity. , while another declined to deal with regulators over his claim to have “guaranteed funding” to take the automaker private.

The decisions regarding Musk’s past deals come amid a busy week for the Tesla chief executive, whose $44 billion offer for Twitter has been approved by the platform’s board of directors. Social media accepted on Monday.

SolarCity’s decision stems from a lawsuit filed by Tesla shareholders against its board over the carmaker’s 2016 all-stock buyback of the struggling solar company. in finance, where Musk is a major investor. Shareholders assumed that Musk, who was chairman of Tesla’s board at the time, was strong armament its other directors to approve the acquisition.

The case has been closely watched by legal observers, as the shareholders bringing the lawsuit have argued that Musk effectively controls Tesla’s board even though he owns only one-fifth of Tesla’s stock. the company.

The remaining members of the Tesla board had previously settled the case for $60 million, leaving Musk to stand trial alone. Last summer he gave fiery testimony In a courtroom in Wilmington, Delaware defended his vision of creating an integrated clean energy company and denied that he had promoted a full stock buyback as a partial bailout. another in his empire.

Joseph Slights, deputy principal of the Delaware Premier Court, argued that story in a ruling in Musk’s favor, writing in his decision Wednesday that while Tesla’s board process “to Negotiating and ultimately proposing the acquisition is far from perfect. . . the preponderance of the evidence that Tesla paid a fair price. “

The deal “marks an important step forward for a company.” [Tesla] for many years has made it clear to the market and shareholders that it intends to expand from an electric carmaker to an alternative energy company,” the judge wrote.

Randall Baron, an attorney representing loss-making shareholders, said: “The court’s decision acknowledged that there were flaws in the deal approval process and a high level of involvement from a conflicting trustee. contradiction”.

The “funding secured” lawsuit was brought by the US Securities and Exchange Commission against Musk for a failed settlement. The regulator accused Musk of engaging in fraud in August 2018 by telling his 22 million followers on Twitter that it had secured financing to take Tesla private for $420 per share. promissory note.

In the end, Musk settled, agreeing to pay a $20 million fine and resign as Tesla chairman. The agreement also obliges the billionaire to obtain pre-approval for any written communications for Tesla, including on Twitter, the social media platform he currently owns. go private in a $44 billion deal.

Musk also agreed that he will not deny the allegations of the complaint or imply that it has no basis in fact.

The SEC then subpoenaed Musk last November after he Twitter user asked The ruling said whether he should sell part of his stake in Tesla to determine if he would seek their approval. In March, Musk asked the court to rescind parts of the subpoena and terminate the consent decree, saying the regulator lacked the authority to make the request and arguing that the subpoena was issued. out with bad intentions.

US District Judge Lewis Liman refuse demanded in a decision on Wednesday: “Musk cannot now seek to withdraw the agreement he knowingly and willingly entered into by simply lamenting that he feels like he must agree to at that time but now – once the specter of litigation is far from memory and his company has become, by his estimation, all but the invincible – the a wish he failed to fulfill.”

Musk did not immediately respond to a request for comment on the decision.

The SEC’s lawsuit against Musk has plagued the world’s richest man for years, as the regulator forced him to produce documents detailing whether certain tweets were pre-approved. not yet.

Musk has repeatedly clashed with the SEC, and earlier this week called their San Francisco offices “shameless puppets of Wall Street,” alleging in a series of tweets that they were colluding with “fishmen.” short” to attack Tesla and “does nothing to protect actual shareholders”.