U.S. Judge Rejects Elon Musk’s Effort to Void Fraud Verdict
On Monday, a U.S. judge dismissed Elon Musk’s attempt to void the fraud verdict related to his dealings with ‘X’, formerly known as Twitter.
The ruling came after Musk sought to overturn a jury verdict that found him guilty of defrauding Twitter investors by attempting to drive down the social media company’s stock price following an agreement for a $44 billion takeover.
Judge Denies Motion to Decertify Investors and Grants Prejudgment Interest
In addition, U.S. District Judge Charles Breyer in San Francisco denied Musk’s motion to decertify the class of investors and granted the investors’ motion for prejudgment interest.
Clear Path for Class-Action Payout
The judge’s decision clears the way for a multi-billion dollar class-action payout to proceed.
Musk Not Found Liable for One Tweet
However, the judge found Musk not liable for one of his challenged tweets while upholding the earlier ruling against him.
Investors Estimate Damages at $2.5 Billion
A lawyer for the investors estimated that following the March 20 verdict, damages could total about $2.5 billion.
Musk Faces Additional Lawsuit in Manhattan
Meanwhile, Musk is also facing a lawsuit in Manhattan alleging he defrauded Twitter investors by waiting too long to disclose his initial investment, causing them to sell at low prices.
Judge Finds ‘Substantial Evidence of Falsity’ in Tweets
The San Francisco jury found Musk liable for tweets on May 13 and May 17, 2022, questioning whether Twitter was overrun by fake accounts or bots. Judge Breyer found “substantial evidence of falsity” in the May 13 tweet.
Investors Claim Tweets Caused Stock Price Drop
Investors argued that these tweets caused Twitter’s share price to fall 18% over two trading days, leading to losses when they sold their shares at depressed prices.