Elon Musk found liable for defrauding Twitter investors

A San Francisco jury ruled Friday that Elon Musk defrauded Twitter investors during his chaotic acquisition of the platform for $44 billion in 2022 — and damages could exceed $2.6 billion.

As Courthouse News Service reported, the case centers on a series of tweets and public statements made by Musk in May 2022, when he publicly questioned the deal by claiming that spam and bot accounts made up a significant portion of Twitter’s user base. Investors argued he was looking for an excuse to walk away or renegotiate the deal on cheaper terms, thereby sending the stock tumbling. The lead plaintiffs in this case sued Musk in October 2022.

After deliberation, the jury unanimously concluded that Elon Musk’s tweets of May 13 and 17 were materially false or misleading. They did not, however, hold him responsible for a comment at a May 16 conference in which he claimed that 20 percent of Twitter users were spam accounts. The jury also rejected the plaintiffs’ broader allegations of a fraudulent scheme.

Elon Musk’s legal team has already announced it will appeal, calling the verdict a “bump in the road.”

The plaintiff’s attorney, Mark Molumphy, told Courthouse News that the verdict makes clear that wealth does not absolve anyone from liability — a point that is increasingly worth emphasizing these days.