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Fraud charges | Elon Musk claims to have been in good faith

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(San Francisco) Elon Musk took the stand Friday in San Francisco in a trial where he is accused of fraud by investors for tweeting more than four years ago that he planned to take Tesla out of the stock market .

Dark suit, white shirt and tie, he defended for half an hour his way of communicating on Twitter and his achievements at the head of the automotive group. His testimony is due to continue on Monday.

The boss of Tesla – and of Twitter, since the end of October – had created a stupor on August 7, 2018 by saying that he wanted to withdraw his group from the Stock Exchange at a price of $ 420 per share, then that the financing was “secured”.

“Elon Musk, (then) CEO of Tesla, lied, and his lies caused people to lose millions of dollars,” Nicholas Porritt, lawyer for the plaintiffs brought together in a class action, launched on Wednesday.

On August 10, 2018, they filed a complaint against the business executive for having “artificially manipulated the price of Tesla’s stock in order to completely ruin investors” who were betting on the price drop.

These downward speculations “should be illegal”, asserted Elon Musk, questioned by Mr. Porritt on Friday about his opinion concerning this type of investor.


PHOTO PETER DASILVA, REUTERS

Nicholas Porritt, plaintiffs’ attorney

“These are bad people stealing money from small investors. They want Tesla dead […] and they will do anything to kill businesses, it’s evil,” he continued for the jury.

” Careless ”

His lawyer Alexander Spiro assured Wednesday that Elon Musk had every intention of taking Tesla out of the stock market and had no doubts about its financing capabilities, thanks to assurances from the Saudi sovereign wealth fund.


PHOTO AMY OSBORNE, FRANCE-PRESSE AGENCY

Alexander Spiro, lawyer for Elon Musk

The tweet was written “hastily”, the choice of words was “reckless”, but “it is not a fraud”, he had hammered.

On Friday, the plaintiffs’ lawyer sought to show that Elon Musk and his entourage were well aware of the consequences of his unbridled volubility on Twitter.

He referred to one of his tweets from July 2018, when he called him a “pedo guy” (“ pedo guy ”) a British speleologist who had criticized him.

“Have you taken a break from Twitter? Mr. Porritt asked, referring to advice to that effect from a senior Tesla official and an investor.

“I don’t think so,” replied the billionaire.

Tweeting “is the most democratic way to communicate. This gives the same access to information to all investors, big or small,” he explained.

He also said market reactions to his tweets were often unpredictable, and took an opportunity to recall how difficult 2018 had been for Tesla.

“I did not sleep at the factory by choice, but by obligation”, he insisted, before adding that the fact of being listed on the stock exchange represented an additional constraint, since the company was exposed to attacks. investors.

Tesla’s stock jumped as high as $386.48 right after the offending tweets. By August 16, it was down to $335.45, according to the figures given to the jury on Tuesday by Judge Edward Chen, far from the $420 per share mentioned by Musk.

“Illusive”

The trial is expected to last three weeks. In a previous decision related to this case, a judge ruled that the famous 2018 tweet could be considered “false and misleading”.

One of the plaintiffs, Timothy Fries, said on Friday that he had invested in Tesla the day after the messages published on Twitter.

For him, the message about “funding secured” meant that Elon Musk “had a partner who was committed and whose funds were approved”.

But the stock price fell in the following days. “I lost $5,000. I hope to recoup my losses,” Mr. Fries said.

The billionaire’s proposal was “incomplete, inconsistent and illusory in some respects,” said Guhan Subramanian, a Harvard professor and specialist in corporate buyouts.


PHOTO PETER DASILVA, REUTERS

Guhan Subramanian, Harvard professor and expert on management buyouts

The manufacturer had quickly abandoned the idea of ​​leaving the rating.

But the American stock market policeman, the SEC, believing that the boss had not provided proof of his financing, had forced him to cede the presidency of the board of directors, to pay a fine of 20 million and subsequently demanded that his tweets directly related to the activity of Tesla are preapproved by a competent lawyer

“Elon Musk sees this lawsuit as a way to have this decision of the SEC reconsidered”, commented Josh White, former economist of the federal agency.

“He thinks he did nothing wrong and he has the right to say what he wants on Twitter. »



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