A federal appeals court signaled a reluctance to revisit the 2018 lawsuit surrounding Tesla CEO Elon Musk’s infamous “funding secured” tweet about taking Tesla private. Investors argued for a new trial, claiming that unclear instructions given to jurors led to confusion in reaching a verdict.
During Friday’s hearing, Tesla investors’ representative argued that the original jury instructions were misleading, emphasizing that Musk’s statements were made recklessly rather than knowingly. The judge overseeing the case, Edward Chen, had previously ruled Musk’s tweet inaccurate, which meant that proving he acted knowingly wasn’t necessary, according to the investors’ lawyer. However, U.S. Circuit Judges on the three-judge panel questioned whether the jury instructions had indeed caused bias. Judge Gabriel Sanchez noted that the language requested by the plaintiffs for jury instructions was similar to what was ultimately provided.
Tesla’s legal team contended that the jury’s findings were justified. They argued that Musk’s statements about “funding secured” were not materially different from the situation at Tesla and that any potential error in jury guidance was harmless. The lawsuit, originally filed in 2018, followed a significant spike in Tesla’s stock price and later losses for investors as Musk’s proposed buyout fell apart.
The case against Musk, which had also prompted a $40 million settlement with the SEC, revolves around his assurances to take Tesla private at a premium of $420 per share. With no clear indication from the court on favoring a retrial, Musk’s defense suggested there was ample reason for the jury’s previous findings.
As deliberations continue, the outcome may set new precedents for investor protection and corporate accountability in the tech sphere.
