- Nadine Youssef and James Clayton
- BBC News, Toronto
If the jury rules in favor of Tesla shareholders, Musk could be ordered to pay billions of dollars in damages.
Elok Musk is on trial over a 2018 tweet about the possibility of taking Tesla private in a $72bn (£58.7bn) deal.
Tesla shareholders filed a lawsuit against Musk, accusing him of manipulating the company’s share price.
In 2018, Musk tweeted that he had “guarantees to fund” the car company’s private equity deal. However, financing was not secured, and the company did not go into private ownership.
Shareholders said they lost billions of dollars over the tweet after the share price plunged. However, the company’s CEO said he believed he had secured financing from the Saudi Public Investment Fund, and had not committed securities fraud.
And if a San Francisco jury rules in favor of the shareholders, Musk could be ordered to pay billions of dollars in damages.
Musk has already paid $20 million to the US Securities and Exchange Commission for the tweet he posted on August 7, 2018, and Tesla has paid another $20 million.
Moreover, the authority removed Musk from the position of Chairman of the Board of Directors of Tesla because of the tweet.
This tweet became legendary in Silicon Valley, as it demonstrated the sheer power of a 140-character tweet on Twitter.
Legal experts said they believed it would be difficult for Musk to win the case, noting that he had paid a $20 million fine to the US Securities and Exchange Commission, which could be used against him in this case. Tesla, in turn, had to pay another $20 million in the same case.
However, it is notoriously difficult to predict the outcome of jury trials in fraud cases.
Musk had wanted to move the trial to Texas, arguing that it would not be possible to find a fair jury in San Francisco.
He claimed mass layoffs at Twitter, which he acquired last year, had affected several employees in San Francisco – and that he was unpopular in the city.
Musk’s legal team said the vast majority of prospective jurors said they viewed the American billionaire negatively.
However, the judge said the trial will go ahead in California.
The trial may see Musk testifying under oath. The witness list also includes Oracle CEO Larry Ellison and media mogul James Murdoch.
