Jury finds Elon Musk misled investors during Twitter purchase, absolves him of some fraud claims

A jury has found Elon Musk liable for misleading investors by deliberately driving down Twitter’s stock price in the tumultuous months leading up to his 2022 acquisition of the social media company for $44 billion. But it absolved him of some fraud allegations, finding that he did not “scheme” to mislead investors.

The civil trial in San Francisco centered on a class-action lawsuit filed just before Mr. Musk took control of Twitter, which he later renamed X. Jurors were asked to decide if two tweets and comments Mr. Musk made on a podcast in May 2022 amounted to him intentionally defrauding Twitter shareholders, who sold their shares based on Mr. Musk’s statements.

The nine-person jury returned the verdict after 3 days of deliberation, nearly three weeks after the trial began on March 2. They said that while Mr. Musk was liable for misleading investors with two tweets — including one said the Twitter deal was “temporarily on hold,” he did not do so with a statement he made on a podcast and that he did not intentionally “scheme” to defraud investors.

Because it is a class action case, it is not clear what amount in damages Mr. Musk will have to pay to thousands of shareholders, many of them institutional investors, but it is likely in the billions. The jury awarded shareholders between about $3 and $8 per stock per day Musk’s fortune is currently estimated at about $814 billion, much of it tied up in Tesla shares.

Much of the trial focused on Mr. Musk’s claims about the number of bots on Twitter. Mr. Musk testified that Twitter had a much higher number of fake and spam accounts than the 5% it disclosed in regulatory filings. He used what he called Twitter’s misrepresentation of the number of fake accounts on its service as a reason to retreat from the purchase.

After Musk tried to back out, Twitter went to court in Delaware to force him to honor his original deal. Just before that case was scheduled to go to trial, Mr. Musk reversed course again and agreed to pay what he had originally promised.