Musk ‘lied’ about funding to take Tesla private, investors’ lawyer says

By Jody Godoy

SAN FRANCISCO, Jan 18 (Reuters) – A lawyer for Tesla Inc
investors said on Wednesday that CEO Elon Musk “lied”
when he tweeted in 2018 that funding was “secured” to take the
company private.

Musk’s alleged lies caused “regular people” to lose
millions, Nicholas Porritt, lead attorney for the investors,
told a jury in San Francisco during opening statements.

“Millions of dollars were lost when his lies were exposed,”
he added.

The case is a rare securities class action trial, and Musk
and his company are bucking the norm of settling claims that
clear high legal hurdles, making for a potentially dramatic
trial at which Musk himself is expected to take the stand this
week.

Tesla investor Glen Littleton is seeking damages on behalf
of shareholders who traded the company’s stock in the days after
Musk posted his plan to take the company private on Twitter in
August 2018.

A jury of nine will decide whether the tweets artificially
inflated Tesla’s share price by playing up the status of funding
for the deal, and if so, by how much.

The defendants, who also include current and former Tesla
directors, have said they will argue that the stock price jumped
in response to Musk saying he was considering taking the company
private, which they say was the case, not his assertion about
funding.

U.S. District Judge Edward Chen, who is overseeing the
trial, has ruled that Musk’s statements about the status of the
deal were false and Musk made them recklessly. The deal did not
happen.

While shareholders sue hundreds of companies and their
executives for alleged securities fraud every year, very few of
those cases make it to trial. The vast majority are either
dismissed by courts or settle.

Not among the jurors selected on Tuesday were some critics
of Musk, such as one potential juror who said the chief
executive, who has gained a reputation for the unpredictable,
was “a little off his rocker.”

After opening statements, shareholders will be able to start
calling witnesses to the stand.
(Reporting by Jody Godoy in San Francisco
Editing by Peter Henderson, Noeleen Walder and Matthew Lewis)