What to know about the Tesla civil suit against Elon Musk
Jury selection in a civil trial against Elon Musk will begin Tuesday in San Francisco, after the Tesla CEO in 2018 misleadingly suggested via tweet that a $72 billion buyout was on the horizon. That online missive later landed the billionaire in hot water with the U.S. Securities and Exchange Commission, who alleged Musk knew such a deal wasn't poised to materialize.
Musk and Tesla were each fined $20 million following an SEC investigation into the matter; Musk was also required to give up his seat as company chair for at least three years, NPR reports. He has repeatedly denied any wrongdoing.
But investors who owned Tesla stock during the period Aug. 7-17, 2018, later filed a class-action lawsuit against the billionaire, alleging he caused them financial harm with his tweets beginning Aug. 7. Per shareholders, the electric car company's stock prices "swung by roughly $14 billion" during the 10-day period addressed by the lawsuit, NPR summarizes. The judge in the case previously ruled that Musk's tweets were reckless and false — meaning the jury must now decide whether Musk knew they were misleading and if they caused material harm to investors. His defense team has argued that their client was, in fact, planning to take Tesla private, even if his claims about the deal were ultimately inaccurate.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Still, Musk's lawyers will face "an uphill battle" in the trial, especially considering the judge's prior verdict regarding the tweets, securities law professor Jill Fisch told The Wall Street Journal.
Depending on the outcome, Musk stands to suffer yet another significant financial blow, added law professor Adam Pritchard, speaking with Bloomberg. "Elon enjoys a good fight," Pritchard said. "He has a lot of money, and is apparently willing to take substantial risks with that money."
The proceedings will also likely shed light on "Musk's management style, given the witness list includes some of Tesla's current and former top executives and board members," like James Murdoch, son of media giant Rupert Murdoch, The Associated Press writes.
Musk is expected to appear on the stand "as early as Wednesday," the Journal writes, and the trial is expected to last about three weeks, per The Guardian.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
-
Is the Gaza war tearing U.S. campuses apart?
Today's Big Question Protests at Columbia University, other institutions, pit free speech against student safety
By Joel Mathis, The Week US Published
-
DOJ settles with Nassar victims for $138M
Speed Read The settlement includes 139 sexual abuse victims of the former USA Gymnastics doctor
By Justin Klawans, The Week US Published
-
14 recent scientific breakthroughs
In Depth From photos of the infant universe to an energy advancement that could save the planet
By Devika Rao, The Week US Published
-
Why is Tesla stumbling?
In the Spotlight More competition, confusion about the future and a giant pay package for Elon Musk
By Joel Mathis, The Week US Published
-
Tesla cuts prices in 'intensifying' EV war
Speed Read Electric vehicle giant has struggled in the face of weakening demand, competition from China and technical setbacks
By Arion McNicoll, The Week UK Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published
-
Disney and DeSantis reach detente
Speed Read The Florida governor and Disney settle a yearslong litigation over control of the tourism district
By Peter Weber, The Week US Published
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published
-
Reddit IPO values social media site at $6.4 billion
Speed Read The company makes its public debut on the New York Stock Exchange
By Peter Weber, The Week US Published