Jury Finds For Musk

A jury found that Musk was not liable for damages to Tesla investors for his "funding secured" tweet.

https://www.reuters.com/legal/securities-fraud-trial-over-elon-musks-2018-tweets-draws-close-2023-02-03/

Were Elon's Tesla Tweets Illegal?

Musk tweeted, and Tesla crashed, but was it securities fraud?

Some background from The Verge:

Musk tweeted he’d sell “almost all” his physical possessions. Well, all right. Then, he tweeted that Tesla’s share price was too high, sending its shares down. Then he tweeted part of “The Star Spangled Banner,” America’s difficult-to-sing national anthem. He encouraged us all to “rage, rage against the dying of the light of consciousness,” which somewhat mangles the meter of Dylan Thomas’ best-known poem. He announced his girlfriend, the musician Grimes, was mad at him.

https://www.theverge.com/2020/5/1/21244747/elon-musk-tesla-tweets-shares-sec-settlement-stock

Tesla's stock crashed after these events, but did Musk act illegally?

The answer is probably no, based on these facts. Basic securities fraud by market manipulation requires an intent to impact the market by a false or misleading statement. So, first the SEC, or a private investor would have to prove that Musk acted with "scienter", that is that he acted with the knowledge that what he was doing was wrong. That is harder to prove unless Musk had some motivation to depress the price of the stock, like owning puts, or planning a stock buyback.

At the same time, is it illegal for an executive to state that his company's stock price is too high? Again, unless he is going to profit from it, probably not, and one could argue that he has an obligation to speak out.

One additional  twist. In his settlement with the SEC last year Musk agreed to have his tweets pre-approved by a company lawyer. If he did not, he may be in violation of the settlement, leading to a host of different problems.

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Mark Astarita is a nationally recognized securities lawyer. He and his partners in his law firm, Sallah Astarita & Cox, LLC, are former SEC and brokerage firm attorneys, representing investors, corporate executives and financial professionals in securities fraud matters across the  country.

Musk Mocks The SEC

I guess when you have a ton of money and just settled SEC charges you can throw caution to the wind, but I wouldn't recommend doing so. From Musk:

"Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work," he said. "And the name change is so on point!"

The amazing part of the story is that the SEC responded to inquiries, to deny that it had changed its name.

https://www.cnn.com/2018/10/04/business/elon-musk-sec-settlement/index.html

Tesla Investigation

Sallah Astarita & Cox is reviewing comments by Elon Musk and SEC filings by Tesla for possible securities fraud claims.

If you have information relative to these issues, or believe you have been the victim of securities fraud call Sallah Astarita & Cox at 212.509.6544.

Tesla Formal Investigation Begins

The SEC has opened a formal investigation regarding Elon Musk's tweet about his going-private plans according to MarketWatch. Regulators have been looking at Musk's tweet from last week stating that funding for taking the car maker private was "secured."

Wall Street's Yearning for Quick Tesla Verdict Hits SEC Snarl

SEC Sends Subpoenas to Tesla Regarding Privatization Plans, Fox Reports