Tesla Investors file Class-Action Lawsuit against Elon Musk over Securities Fraud

In the opening statements of Musk’s securities fraud trial on Wednesday, the lawyer representing Tesla investors said that the billionaire lied about securing the funding to take the EV company private back in 2018.

Nicholas Porritt, the lawyer representing Glen Littleton and other Tesla shareholders in a class-action suit against Musk started by saying to the court on how Muk’s tweets have caused financial suffering to his clients. “We are here because Elon Musk, chairman and chief executive of Tesla, lied. His lies caused regular people like Glen Littleton to lose millions and millions of dollars,” he said. 

Later, Musk's lawyer Alex Spiro in his address to the jury said that Musk's intention to take Tesla private was true but he had no ill intentions towards the shareholders. Spiro called Musk’s tweets as informal sporadic thoughts. “Mr Musk tries to do things that have never been done before. Everyone knows that,” Spiro told the jury emphasising Musk’s habit of disrupting industries for the good.

The securities fraud trial is focused on tweets made by Musk in August 2018 on Twitter, which he now owns. The tweets exhibited that Musk had lined up the financing to take Tesla private during a time when its stock was weighed down due to production bottlenecks. 

Glen Littleton, a 71-year-old investor, was the first witness called to the stand. He said that Musk’s claim about “funding secured” was alarming to him. He said he sold most of his holdings after seeing a lot of loss on his Tesla portfolio since Musk’s tweet. “I’m hoping we recover the losses that were incurred because of the tweet,” Littleton said.

In terms of pure numbers, Musk’s funding tweet definitely had a wild effect on Tesla’s share price with a swing of about $14 billion in a week.

Senior United States district judge Edward Chen earlier refused Musk’s request to move the trial from the state of California to Texas.

The trial’s proceeding will continue on Friday with Porritt hoping to get Musk on the stand.

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