In a courtroom in California, jury selection began on Tuesday. The case centers on whether Elon Musk committed fraud when he claimed in a pair of 2018 tweets that he was about to take Tesla private.
Tesla shareholders are suing Musk because they believe the entrepreneur acted recklessly and caused them to lose billions of dollars as a result of the tweets that sent the stock price on an up-and-down trip.
The three-week trial is scheduled and comes at a delicate time for Musk, who will probably be asked to testify.
Investor dissatisfaction with Musk’s acquisition of Twitter, the social media site to which the billionaire appears to be dedicating a lot of his attention, has caused Tesla’s share price to fall during the past year.
For allegedly costing them billions of dollars with a tweet that stated “funding secured” for a project to buy out the publicly traded electric automaker, shareholders sued Musk in 2018.
Musk clarified in a subsequent tweet that “investor support is confirmed” and that the shareholder vote was the only thing left to complete the transaction.
“The plaintiff alleges that these tweets were materially false and artificially affected the price of Tesla stock and other securities after they were made,” US District Court Judge Edward Chen said while summarising the case for potential jurors.
US authorities have already looked into Musk’s brief tweets from last year.
The Securities and Exchange Commission, the nation’s stock market watchdog, mandated that Musk vacate his position as Tesla’s board chairman and that the business and Musk both pay a $20 million punishment.
Musk denies being dishonest, and his attorneys anticipate calling on witnesses to attest to his goals at the time, including Larry Ellison, a billionaire friend of Musk’s.
After Chen last week rejected Musk’s plea to move the trial to Texas, the southern state where Musk has relocated Tesla’s headquarters, the jury selection process got under way.
Musk’s attorneys contended that because Twitter is based in San Francisco, he would not receive a fair trial.
On Tuesday, the court went over the questionnaire responses from numerous prospective jurors, which included their thoughts on Musk.
One prospective juror admitted that he was unlikely to be unbiased. “There’s also the billionaire aspect. I’m not a big fan of those people,” he said.
The jury selection candidates were urged to stay “open-minded” even after hearing the accusers’ side of the story, according to Alex Spiro, Musk’s attorney.
Additionally, he urged the judge to avoid discussing “recent events at Twitter.”
After assuming control of the social media platform in October, Musk sacked more than half of its 7,500 staff and changed its content moderation guidelines, unblocked Donald Trump’s account, among other things.
“For the last several months, the local media have saturated this district with biased and negative stories about Musk that have fostered… highly prejudicial biases in the jury pool,” the CEO’s lawyers argued in a filing.
