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Jury seated in Tesla shareholder case over Musk's 2018 tweets

Published 01/17/2023, 06:07 AM
Updated 01/17/2023, 07:56 PM
© Reuters. Elon Musk arrives at the In America: An Anthology of Fashion themed Met Gala at the Metropolitan Museum of Art in New York City, New York, U.S., May 2, 2022. REUTERS/Andrew Kelly
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By Jody Godoy

SAN FRANCISCO (Reuters) -A jury of nine people in San Francisco was chosen on Tuesday to hear a case brought by Tesla (NASDAQ:TSLA) Inc shareholders over CEO Elon Musk's 2018 tweets that he had secured funding to take the electric care maker private.

None of the jury members expressed strong views about the billionaire, as U.S. District Court Judge Edward Chen attempted to select an impartial group to decide whether Musk's statement that funding was "secured" amounted to fraud and cost investors "billions."

Chen homed in on a handful of panelists who said in questionnaires that they viewed Musk as "crazy" and "arrogant."

"I think he's a little off his rocker, on a personal level," said one juror, referring to Musk's management of Twitter, which he took over in October.

That potential juror and others said they could set their views aside and judge the case impartially if selected, but they were not included on the jury, nor was another potential juror who described Musk as a "smart, successful pioneer."

Since rising to prominence as head of Tesla, Musk has gained a reputation for unpredictable behavior, from anointing himself Tesla's "technoking" to naming one of his children with a symbol to his stated dream of colonizing Mars.

Investors sued in August 2018, shortly after Musk posted on Twitter that he was considering taking Tesla private at $420 per share. "Funding secured," he said.

In another tweet the same day, he wrote, "Investor support is confirmed," adding, "only reason why this is not certain is that it's contingent on a shareholder vote."

Chen has ruled that those statements were untrue and reckless. The jury will decide if Musk's words mattered to investors, whether he acted knowingly and whether to award damages and in what amount.

The defendants, who also include seven current and former Tesla directors, have denied wrongdoing.

They have said in court papers that they will argue that Musk had good reason to believe funding for the deal was secured.

The billionaire had met Yasir Al-Rumayyan, the managing director of Saudi Arabia's sovereign wealth fund, on multiple occasions, according to the court filing, which also said Al-Rumayyan had urged Musk to take Tesla private and offered up to $60 billion in backing.

© Reuters. Elon Musk arrives at the In America: An Anthology of Fashion themed Met Gala at the Metropolitan Museum of Art in New York City, New York, U.S., May 2, 2022. REUTERS/Andrew Kelly

Musk may take the stand in the case, according to court documents, along with Oracle Corp (NYSE:ORCL) co-founder Larry Ellison and James Murdoch, son of Fox Corp Chairman Rupert Murdoch.

The trial is scheduled to continue with opening statements on Wednesday.

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