A federal jury in San Francisco has found Elon Musk liable for defrauding Twitter (now X) investors in 2022 by disparaging the company in an effort to secure a lower purchase price for the platform, Bloomberg News reported on Friday.
Jurors concluded that Musk intentionally misled shareholders by claiming the social media company—later renamed X—had an excessive number of fake accounts, while attempting to withdraw from his $44 billion acquisition deal, the report said. However, the court absolved him of some fraud allegations, adding that he did not “scheme” to mislead investors.
Jurors were tasked with determining whether two tweets and comments Musk made on a podcast in May 2022 constituted intentional fraud against shareholders who traded based on his statements.
After three days of deliberations, the nine-member jury concluded that Musk misled investors through two tweets — including one stating the deal was “temporarily on hold” — but did not do so via his podcast remarks and did not engage in a deliberate scheme to defraud.
The verdict came nearly three weeks after the trial began on March 2. While damages in the class-action case remain to be finalised, they are expected to run into billions of dollars.
The jury awarded shareholders between about $3 and $8 per share per day.
Much of the case focused on Musk’s claims regarding the number of fake accounts on Twitter. He argued that the platform had significantly more bots and spam accounts than the roughly 5% disclosed in regulatory filings, using this as grounds to attempt to withdraw from the $44 billion deal.
After Musk sought to back out, Twitter filed a lawsuit in Delaware to enforce the agreement. Just before the case was set to go to trial, Musk reversed course and agreed to proceed with the acquisition on the original terms.
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