SAN FRANCISCO — A court said that Elon Musk‘s 2018 tweets that funding was secured to take Tesla Inc. private was inaccurate and reckless, saying “there was nothing concrete” about financing from Saudi Arabia’s sovereign wealth fund at that time.
The decision by U.S. District Judge Edward Chen of San Francisco is a major victory for investors alleging that Musk inflated stock prices by making false and misleading statements, causing billions of damages.
In 2018, Musk met with representatives of the Saudi Arabia’s Public Investment Fund and had a discussion about taking Tesla private, but evidence shows that “there was nothing concrete about funding coming from the PIF,” the judge wrote.
“Rather, discussions between Tesla and the PIF were clearly at the preliminary stage.
“No reasonable jury could find that Mr. Musk did not act recklessly given his clear knowledge of the discussions,” he said.
He said details such as the total amount of funding needed to take Tesla private or the price to be paid for Tesla stock were not discussed.
The summary judgment, made on April 1, was sealed for more than a month before it was publicly available on Tuesday. Word of the ruling leaked out a few weeks ago.
“It is hugely significant,” shareholder attorney Nicholas Porritt, a partner at Levi & Korsinsky LLP told Reuters.