Jury: Musk Misled Twitter Investors, But Clears Him of Fraud Scheme

A San Francisco jury determined Elon Musk deliberately misled Twitter investors with statements that drove down stock prices before his $44 billion purchase. While finding him liable for investor deception, jurors cleared him of intentionally scheming to defraud shareholders.

SAN FRANCISCO — Elon Musk has been held responsible by a jury for intentionally deceiving Twitter investors through statements that caused the company’s stock value to drop during the chaotic period before his $44 billion takeover in 2022. However, the panel cleared him of deliberately orchestrating a scheme to defraud shareholders.

The San Francisco civil case stemmed from a class-action lawsuit filed shortly before Musk completed his acquisition of Twitter, the platform he subsequently rebranded as X. The jury was tasked with determining whether specific social media posts and podcast remarks made by Musk in May 2022 constituted deliberate fraud against Twitter stockholders who made selling decisions based on his public statements.

Following three days of jury deliberations, the nine-member panel delivered their decision nearly three weeks after proceedings commenced on March 2. The verdict established Musk’s liability for deceiving investors through two social media posts, including one stating the Twitter acquisition was “temporarily on hold,” while clearing him of fraud related to podcast comments and rejecting claims of an intentional deception “scheme.”

The financial impact for Musk remains uncertain since this is a class-action matter involving thousands of shareholders, including major institutional investors, though damages could reach billions of dollars. The jury determined compensation should range from approximately $3 to $8 per share for each affected day.

With an estimated net worth of roughly $814 billion, primarily from Tesla stock holdings, Musk has substantial resources to cover potential damages.

Trial proceedings heavily examined Musk’s assertions regarding automated accounts on Twitter’s platform. During testimony, Musk maintained that Twitter harbored significantly more fake and spam profiles than the 5% figure reported in official regulatory documents. He pointed to what he characterized as Twitter’s false reporting of bogus accounts as justification for attempting to withdraw from the acquisition.

When Musk sought to abandon the deal, Twitter pursued legal action in Delaware courts to compel completion of the original agreement. Just as that litigation was set to begin, Musk changed direction once more and fulfilled his initial financial commitment.