Tesla CEO Elon Musk has been sued by a group of its shareholders due to his 2018 tweets that indicated that he wants to take the electric car company private. \u00a0The Tesla shareholders have asked the judge to order the CEO not to comment on this case anymore.<\/p>\n
According to the lawyers for these shareholders, the judge, in this case, ruled that the statement that Musk had secured funding to turn Tesla into a private company was false. \u00a0Instead, Musk’s tweet to take the company private at $420 per share was to manipulate its share price, thus costing shareholders money. \u00a0Therefore Musk’s present comments violated the court settlement with US securities regulators in 2018.\u00a0 In this court settlement, both Tesla and Musk agreed to pay $20 million in fines.<\/p>\n
However, during the TED 2022 conference on Thursday, Musk was interviewed and said he had “funding secured” to take Tesla private in 2018.\u00a0 He further called SEC a profane name and stated that he agreed to the court settlement because bankers threatened not to provide capital if he failed to settle, and the company would go bankrupt.<\/p>\n
The lawyers representing Tesla shareholders allege that Musk\u2019s comments are campaigns to influence potential jurors in this lawsuit as it gets closer to trial.\u00a0 They wrote, “Musk\u2019s comment risks confusing potential jurors with the false narrative that he did not knowingly make misrepresentations with his August 7, 2018 tweets.\u00a0 His present statements on that issue, an unsubtle attempt to absolve himself in the court of public opinion, will only have a prejudicial influence on a jury.\u201d<\/p>\n
The plaintiff\u2019s lawyers want Judge Edward M. Chen to restrain the CEO from commenting on the issue further until after the trial.\u00a0 Because of that, lawyers representing Elon Musk have up to Wednesday to respond to this case.\u00a0 However, according to one of Musk\u2019s lawyers, Alex Spiro, the shareholders\u2019 lawyers are seeking a big payout.<\/p>\n
He wrote, “Nothing will ever change the truth, which is that Elon Musk was considering taking Tesla private and could have.\u00a0 All that’s left some half-decade later is random plaintiffs lawyers trying to make a buck and others trying to block that truth from coming to light, all to the detriment of free speech.\u201d<\/p>\n
On the other hand, the shareholder\u2019s lawyers confirmed that the judge had already ruled and termed Musk’s tweets as false and misleading thus, \u201cno reasonable juror could conclude otherwise.\u201d The judge\u2019s order dated April 1 was sealed because of some evidence that the CEO and the company consider confidential thus, it was missing in the public court file.\u00a0 Adam Apton representing the shareholders, wrote, \u201cOur motion for a temporary restraining order (TRO) accurately describes the issues decided by the court.\u201d<\/p>\n
The 2018 court agreement arose because of Musk’s tweets about Tesla, where SEC filed a complaint alleging securities law violations.\u00a0 The CEO agreed to the fine and the court agreement that partly says he \u201cwill not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis.\u201d<\/p>\n
SEC will ask the court to do away with the agreement in the event of any violations and restore the securities fraud complaint.\u00a0 But lawyers on behalf of Musk have asked the federal court to scrap the agreement because SEC uses its “near-limitless resources\u201d to silence Musk.\u00a0 According to Spiro, the lawyer who filed the court documents, the agreement was signed when Tesla was much younger, and the action has jeopardized its financing.<\/p>\n