Elon Musk “lied” by tweeting he had funding for taking the company private, lawyers claim.
Solicitors representing Tesla investors called out the billionaire on the first day of his trial on Wednesday, January 18.
Musk is appearing before a nine-person jury in San Francisco to determine whether the Tesla CEO cheated investors.
Musk’s attorney argued that the billionaire merely used the “wrong words” while tweeting about his plans in 2018.
The lead attorney for the investors, Nicholas Porritt, said Musk’s alleged lies led “regular people” to lose millions.
He said: “Millions of dollars were lost when his lies were exposed.”
Musk’s lawyer Alex Spiro refuted this, saying Musk was “serious” about taking the firm private in 2018, but ran into shareholder pushback.
During the opening statements, he said: “You will come to learn very soon that this was not fraud, not even close”.
Mr. Spiro told the jury that Musk expected financing wouldn’t be a problem and that he was “taking steps” to strike a deal.
He added that while the tweets had “technical inaccuracies,” Musk was concerned that certain investors were aware of his plan to go private.
He argued the Tesla CEO wanted to get the information out to the “everyday shareholder” that he “wanted to protect.”
Mr. Spiro said: “In a rush, he used the wrong words.”
The case is a rare securities class action trial.
Musk and his company are resisting the norm of settling claims that clear high legal obstacles, which sets the stage for a potentially explosive trial.
Musk is set to testify as early as this week.
A jury of nine will decide whether the tweets artificially inflated Tesla’s share price by playing up the status of funding for the deal and if so, by how much.
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The defendants are current and former Tesla directors whom Spiro said had “pure” motives in their response to Musk’s plan.
The first witness, Glen Littleton, spoke for about three hours on Wednesday, January 18.
The trial will continue on Friday with an expert witness, and Musk may also testify.