The jury trial in Tesla investors’ class-action lawsuit against Elon Musk proceeded today with opening statements in a San Francisco federal courtroom. Plaintiff’s attorney Nicholas Porritt told the jury the case was brought “because Elon Musk, Tesla’s chairman and chief executive officer, who is not in court today but you will see him sitting right there in the witness box, lied. And his lies caused regular people like Glen Littleton to lose millions and millions of dollars.”
Porritt pointed out that Judge Edward Chen already ruled Musk’s statements in August 2018 about having “funding secured” to take Tesla private were false and made recklessly. The case is being held in US District Court for the Northern District of California.
Because of the judge’s ruling and instructions that will be given to the jury, “you are to assume that every word, every part of this tweet is false,” Porritt said.
“There was no dispute that Elon Musk lied,” Porritt also said. “And there was no dispute that Tesla investors were hurt by these lies. How were they hurt? They lost lots of money in a short period, from August 7 to August 17, 10 days, because of Elon Musk’s lies.”
After Musk’s false “funding secured” claim, “Tesla’s stock price shot up. Millions of shares were bought,” Porritt said. “But then the stock price tanked almost as quickly as it went up and millions of dollars were lost when his lies were exposed. The question for you, the jury, is to decide whether Elon Musk and Tesla and its board of directors should be held responsible for the hurt and the harm that were caused by his lies.”
Musk’s defense claimed the false statements were just “technical wordsmith inaccuracies” and that they weren’t material to investors.
Lead plaintiff lost most of life savings
Lead plaintiff Glen Littleton, 71, testified today after opening statements. He’s a self-employed investor from Kansas City.
Porritt told the jury in his opening statement that Littleton “was a big believer in Tesla and Elon Musk. He believed in the technology, he supported the environmental message. He will describe the pain and upset he suffered on August 7 when almost his entire life savings, the product of 50 years of work, were almost wiped out by Elon Musk’s lies and tweets about ‘funding secured.'”
Porritt described another witness who will testify during the trial as a hard-working product manager who is investing what he can for retirement. “He heard of Elon Musk’s tweets and thought it was a good time to buy Tesla stock. He lost thousands of dollars which he could not afford to lose when the falsity of the August 7 tweets were revealed,” Porritt said.
The class-action lawsuit seeks billions of dollars of damages overall. Thousands of investors lost money because of Musk’s false tweets, Porritt said.
The case is primarily about two tweets Musk made on August 7, 2018. The first said, “Am considering taking Tesla private at $420. Funding secured.” The second tweet said, “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.”
Porritt said Musk tweeted when he was driving his car to the airport and that he selected the proposed share price of $420 as a cannabis-related joke. “It was no joke to Glen Littleton or other Tesla investors who lost millions of dollars. It’s no joke to millions of investors who rely on true information going into the market to buy or sell stock,” Porritt said.