Elon Musk may have to fork out a small fortune after being found guilty of deliberately defrauding Twitter investors before he took control of the social media platform from Jack Dorsey.
His 2022 acquisition of Twitter set Musk back an eye-watering $44 billion; but that's nothing to the SpaceX founder who, as of March 21, has a net worth of more that $814 billion, according to Forbes.
In the lead up to the acquisition, Musk made comments online and on a podcast that inferred that he was considering backing out of the deal which sparked some Twitter shareholders to sell their shares.
Musk allegedly then started to buy more shares at a cheaper price once people had sold up.
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The 54-year-old went on to be hit with a civil lawsuit which accused him of deliberately driving down Twitter’s stock price.
A trial has since taken place in San Francisco, California, where a jury found Musk liable for this.
The jury absolved him of some fraud allegations, finding that he did not 'scheme' to mislead investors, however.
Jurors were asked to decide if two tweets and comments Musk made on a podcast in May 2022 amounted to him intentionally defrauding Twitter shareholders, who sold their shares based on Musk’s statements.
The nine-person jury returned the verdict after three days of deliberation, nearly three weeks after the trial began on March 2.
They said that while Musk was liable for misleading investors with two tweets — including one said the Twitter deal was 'temporarily on hold' – but he did not do so with a statement he made on a podcast and that he did not intentionally 'scheme' to defraud investors.
Because it is a class action case, it is not clear what amount in damages Musk will have to pay to thousands of shareholders, many of them institutional investors, but it is likely in the billions.
The jury awarded shareholders between about three to eight dollars per stock per day.
It has been suggested that damages could amount to as much as $2.6 billion.
"It’s an important victory, not just for investors of Twitter, but for the public markets," said Joseph Cotchett, a lawyer for the plaintiffs.
"I think the jury’s verdict sends a strong message that just because you’re a rich and powerful person, you still have to obey the law, and no man is above the law."
Musk's attorneys are reportedly wanting to appeal the decision.
They said statement via email following yesterday's decision (per CNBC): "We view today’s verdict, where the jury found both for and against the plaintiffs and found no fraud scheme, as a bump in the road. And we look forward to vindication on appeal."
Niamh Shackleton