DETROIT (AP) – A group of Tesla shareholders is suing CEO Elon Musk over some 2018 tweets for a private company, asking a federal judge to order Musk to stop commenting on the case.
Lawyers for the shareholders of the Austin, Texas-based company also say in court documents that the judge in the case ruled that Musk’s tweets about “secured funding” for Tesla’s private takeover were fake and that his comments also violated a court settlement. from 2018 with US securities regulators, in which Musk and Tesla agreed to pay fines of $ 20 million.
Musk, during an interview Thursday at the TED 2022 conference, said he had the funding to make Tesla private in 2018. He called the Securities and Exchange Commission obscene and said he settled only because his bankers said they would stop providing capital if he did not and Tesla would go bankrupt.
The interview and lawsuit came just days after Musk, the world’s richest man, made a controversial offer to take over Twitter and turn it into a private company with a $ 43 billion offer of $ 54.20 a share. The Twitter board on Friday adopted a strategy for a “poison pill” that will make it much more expensive for Musk to buy the shares.
In court documents filed Friday, Tesla shareholders’ lawyers say Musk is trying to influence potential jurors in the lawsuit. They claim that Musk’s 2018 tweets about having the money to take Tesla’s private property at a price of $ 420 per share were written to manipulate the share price, which costs shareholders money.
Lawyers are now claiming that Musk is campaigning to influence potential jurors as the case approaches trial.
“Musk’s comments risk confusing potential jurors with the false story that he did not make deliberate misconceptions with his August 7, 2018 tweets,” the lawyers wrote. “His current statements on this issue, an unpretentious attempt to justify himself before the court of public opinion, will only have a prejudiced influence on the jury.
Lawyers asked Judge Edward M. Chen in San Francisco to prevent Musk from making further public comments on the matter until after the trial. Chen gave Musk’s lawyers until Wednesday to answer.
Alex Spiro, a lawyer representing Musk, wrote in an email Sunday that the plaintiffs’ lawyers want a large payout. “Nothing will ever change the truth, which is that Elon Musk was considering taking Tesla privately and could do so,” he wrote. “All that is left half a decade later are random plaintiff lawyers trying to make money and others trying to prevent this truth from coming to light, all to the detriment of freedom of speech.
But shareholders’ lawyers wrote that Chen had already ruled that Musk’s tweets were fake and misleading, and that “no reasonable juror can conclude otherwise.”
Judge Chen’s order, issued on April 1, was not in the public court file from Sunday. Adam Upton, a shareholder’s lawyer, said it was sealed because there was evidence that Musk and Tesla said was confidential. It will remain sealed until the parties agree on whether something should remain sealed, he wrote in an email. “Our proposal for a TRO (temporary restraining order) describes exactly the issues decided by the court,” Upton wrote.
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Following Musk’s tweets in 2018, the SEC filed a complaint against him alleging violations of the Securities Act. Musk then agreed to the fine and signed the court settlement. Part of the agreement says that Musk will not take any action, nor will he make or allow any public statement to be made that denies, directly or indirectly, any allegation in the complaint or gives the impression that the complaint is without factual basis. “.
If Musk violates the agreement, the SEC could ask the court to overturn it and reinstate the securities fraud complaint, the agreement said. A message was requested on Sunday asking for comment from the SEC.
Spiro, on behalf of Musk, has already asked a federal court in Manhattan to reject the agreement. He claims that the SEC uses the pact and “almost unlimited resources” to cool Musk’s speech. Spiro’s court documents say Musk signed the agreement when Tesla was a less mature company and the SEC’s actions jeopardized its funding.
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