Musk liable for fraud against Twitter shareholders

Elon Musk has been found liable for defrauding Twitter shareholders regarding his $44 billion takeover of the company. A jury in San Francisco concluded that Musk misled investors about the number of fake accounts on the platform.

Musk found liable

Damages in the case are estimated to potentially reach $2.5 billion.

Francis Bottini, representing the shareholders, insisted that Musk’s wealth does not exempt him from accountability.

Musk’s legal team described the verdict as “a bump in the road,” expressing confidence in an eventual appeal.

The civil trial commenced on March 2, with deliberations beginning on Tuesday.

Earlier this year, Musk faced another trial concerning claims related to his statements about Tesla’s financing.

Despite disputes, Musk completed the Twitter acquisition in October 2022, thereafter rebranding the platform to X.

Jurors determined Musk was liable for two specific statements made shortly after agreeing to acquire Twitter.

One statement claimed the acquisition was “temporarily on hold,” while the other suggested bots could exceed 20% of users.

The jury ruled that, while Musk made misleading statements, the shareholders failed to prove that he intended to defraud them.

Michael Lifrak, Musk’s attorney, argued that Musk’s concerns about bot accounts were legitimate, and voicing those worries does not constitute fraud.

The lawsuit pertains to investors who sold Twitter shares at artificially lowered prices due to Musk’s comments from May 2022 to October 2022.

Musk typically opts for legal battles over settlements with shareholders.