Elon Musk found liable in fraud lawsuit by Twitter shareholders in deal worth more than $44 billion<\/figcaption><\/figure>\n<\/div>\nA federal jury found Elon Musk liable on claims he defrauded Twitter shareholders by trying to drive down the social media company’s stock price so he could renegotiate or back out of a $44 billion acquisition in 2022, Bloomberg News reported Friday.<\/p>\n
According to the report, the damage will be determined later.<\/p>\n
The verdict by a jury in San Francisco federal court came in a closely watched trial where Musk, the world’s richest man, was accused of falsely claiming that Twitter underreported how many fake and spam accounts, known as bots, were on its platform.<\/p>\n
Musk eventually completed his purchase of Twitter in October 2022 and changed its name to X. He has since added it to his rocket and space exploration company SpaceX.<\/p>\n
The civil trial began March 2 and jurors began deliberations Tuesday.<\/p>\n
Musk has often chosen to fight shareholders in court rather than reach a settlement.<\/p>\n
This includes a 2023 lawsuit in San Francisco over whether he defrauded Tesla shareholders, who claimed to have suffered losses after falsely claiming \u201cfunding was secured\u201d to take the electric car company private in 2018, and a lawsuit in Delaware over his $139 billion Tesla pay package. Musk won both the cases.<\/p>\n
In the latest test, Twitter shareholders challenged Musk on three occasions after agreeing to buy Twitter in April 2022 to publicly question whether the company was overrun by bots, and perhaps disclosed 20% or more instead of 5%.<\/p>\n
Shareholders cited, among other things, a May 17, 2022 tweet in which Musk said his acquisition “cannot proceed” unless Twitter’s chief executive proved the bot percentage was below 5%.<\/p>\n
“They ruined the company. Ruined the executives. And ruined the stock,” Mark Molumphy, a lawyer for shareholders, said during his closing arguments Tuesday.<\/p>\n
Musk’s attorney Michael Liferack countered that the billionaire’s concerns about bots were genuine, and that speaking out about the problem does not indicate that Musk committed fraud or intended to commit fraud.<\/p>\n
The lawsuit covers investors who claimed to have sold Twitter shares at a price artificially depressed by Musk between May 13 and October 4, 2022.<\/p>\n
Musk is separately negotiating to settle a civil lawsuit from the U.S. Securities and Exchange Commission that accuses him of waiting too long to disclose his initial purchase of Twitter in 2022 so he could buy more at a lower price before investors could see what he was doing.<\/p>\n
SpaceX in February bought Musk’s artificial intelligence company xAI, which housed X. The purchase created the world’s most valuable private company, worth approximately $1.25 trillion at the time.<\/p>\n<\/p><\/div>\n