A federal judge in San Francisco has denied Elon Musk’s attempt to overturn a jury verdict that found him liable for defrauding Twitter investors by making misleading statements about the company’s bot accounts during his $44 billion acquisition of Twitter.
- Judge affirms jury verdict finding Musk liable for misleading tweets about Twitter bots
- Motion to decertify investor class rejected; prejudgment interest approved
- Musk cleared on one tweet; judge dismisses bias claims related to ’420’ verdict highlight
What happened
U.S. District Judge Charles Breyer rejected Elon Musk’s bid to nullify a jury verdict that found he defrauded Twitter investors during his efforts to acquire the company. The verdict followed Musk’s tweets in May 2022 claiming that Twitter’s bot accounts might exceed 5%, statements the jury concluded were false and used by Musk as leverage to renegotiate or walk away from the $44 billion deal.
The court also denied Musk’s attempt to decertify the class of investors involved and granted the investors’ request for prejudgment interest on damages, which investors’ attorneys estimate to be around $2.5 billion. However, Musk was found not liable for a specific tweet made on May 17, 2022, as the judge agreed that it did not cause investor losses.
Why it matters
This ruling upholds a significant judicial rebuke of Musk’s conduct during one of the highest-profile tech acquisitions, reinforcing legal accountability for public statements that impact investor decisions and stock valuations. It highlights the risks billionaires face when using social media communications as strategic negotiation tools in corporate deals.
By denying attempts to dismiss the investor class and confirming possible billions in damages, the decision may also influence how future takeover negotiations are conducted, encouraging more transparency and caution in statements made to the market. Moreover, it clarifies that social media posts by influential corporate figures can be scrutinized as official disclosures under securities law.
What to watch next
Attention will focus on how damages are calculated and awarded to the Twitter investor class and whether Musk will pursue further appeals against this ruling. The resolution of this case could set precedent for similar disputes involving social media communications and investor claims in high-stakes acquisitions.
Additionally, Musk faces separate litigation regarding the timing of disclosures about his Twitter share purchases, which may compound financial and reputational risks. How Musk and his legal team navigate these ongoing challenges could affect his broader business ventures, including his leadership over Twitter’s rebranded entity, X.