Tesla founder and tech entrepreneur Elon Musk has been cleared of fraud in his infamous “funding secured” case following a ruling by a federal district court in New York earlier this summer.
Musk had been accused of committing securities fraud after tweeting “funding secured” in August 2018, claiming that he had secured funds to take Tesla private at $420 per share. Musk’s statement caused a drastic spike in the price of Tesla’s stock, but the funding he claimed to have secured never materialized, leading to the charges.
The lawsuit was brought to court by the U.S. Securities and Exchange Commission (SEC) on behalf of shareholders who felt they had been misled. The SEC argued that Musk’s tweet was both inaccurate and deceiving and sought to block Musk from serving as an officer or director of a publicly-traded company and sought a monetary fine.
However, Musk has now been cleared of fraud by a federal district court in New York. The court acknowledged that Musk’s statement was misleading, but found that it did not rise to the level of fraud. Instead, the court viewed Musk’s tweet as an opinion rather than a statement of material fact and noted that he had deleted the tweet shortly after it was posted. On that basis, the court chose not to levy any penalties and cleared Musk of the charges.
The news of his exoneration was welcomed by Musk and Tesla, and while the SEC is considering appealing the ruling, the result remains a victory for Musk and the tech world at large.
The outcome of the case not only has implications for Musk personally, but also serves as an important reminder of the power of social media and the importance of accuracy when disseminating information. Companies and individuals communicating on social media must take due care to ensure what they are saying is true, as false statements can lead to serious legal and financial consequences.
Ultimately, Musk’s triumph in the “funding secured” case highlights the importance of accurate communication, even in the fast-moving world of social media.