Judge Rules Against Elon Musk in Tweet Case

Tim Healey
by Tim Healey

When Tesla boss Elon Musk expressed a desire to buy Twitter last week, citing an absolutist vision of free speech as at least one reason behind his motivations, one had to wonder if his running afoul of the Securities and Exchange Commission over one of his tweets played a part.

To be sure, even if Twitter had no regulations moderating speech on the platform, Musk (or anyone in a similar position) could violate SEC regulations via tweet — a platform’s rules don’t protect someone from the Feds’ regs.

Still, Musk has shown a thin skin for criticism and it often appears that he desires to be able to say what he wants on Twitter without consequences. Consequences like having a federal judge rule that Musk knew certain infamous tweets about taking the company private having secured funding at $420 a share were misleading.

Tesla investors sued after the tweets hurt the company’s stock and lost them money. It’s a class-action suit and Musk and Tesla could be on the hook for billions in damages.

Lawyers for the shareholders are seeking a restraining order against Musk, to prevent him from speaking publicly about the tweets before the trial.

The shareholders have expressed concern that tweets from Musk could taint the jury pool. “[Musk] has used his fame and notoriety to sway public opinion in his favor, waging battle in the press having been defeated in the courtroom,” their lawyers wrote in the filing.

Obviously, this doesn’t mean Tesla and Musk have lost the lawsuit. It only means that U.S. District Court Judge Edward Chen believes Musk knew his tweet was “false and misleading” and “held that he recklessly made the statements with knowledge as to their falsity.”

As for Musk’s defense? First, his lawyer, Alex Spiro, claims Musk really was thinking about taking Tesla private in 2018 and had the financing to do so. Second: “free speech”.

“All that’s left some half decade later is random plaintiffs’ lawyers trying to make a buck and others trying to block that truth from coming to light, all to the detriment of free speech,” he said.

Here are the case specs, if you’re curious: In re Tesla Inc Securities Litigation, U.S. District Court, Northern District of California, No. 18-04865.

As for this author, I cannot pretend to know if Musk knowingly lied for whatever reason (including a poorly received attempt at humor) or if he really was sincere about going private. I do think, however, that “free speech” doesn’t necessarily apply when your words can move markets and possibly violate SEC regulations.

Actions, consequences, et cetera.

[Image: Naresh111/Shutterstock.com]

Tim Healey
Tim Healey

Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.

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  • Jwee Jwee on Apr 20, 2022

    @EBFlex "This is called projection. Musk is not for limiting anyones speech. He has never limited anyones speech." Musk blocked Robert Reich from his Twitter feed after he criticized Musk for how he treated his Tesla workers. As Reich explained from a week ago... https://www.eurasiareview.com/12042022-robert-reich-why-elon-musk-has-blocked-me-on-twitter-and-now-owns-the-joint-oped/

    • EBFlex EBFlex on Apr 20, 2022

      Nice pivot. How did that limit Robert Reich’s ability to speak or use Twitter? Thank you for proving my point.

  • Jwee Jwee on Apr 20, 2022

    Perhaps I am wrong, but when someone says "The sky is never red" and then you show them a sunset, it is not a pivot. The pivot is the person shifting the argument, trying to claim that they never said what they clearly. My good chap, you stated that Musk *never* limited anyones speech. Your exact words were: "Musk is not for limiting anyones speech. He has never limited anyones speech." I cannot know what Musk is for or against, nor can you, but clearly he limited one person's speech, Reich’s on Musk's twitter feed. Reich cannot post on Musk's feed. Thus your statement about "never limiting anyones speech" is inaccurate. The empty set is not longer empty when it contains even a single object. Sure, Reich can stand on some other soapbox a blabber all he wants, but Musk specifically limited Reich's speech, which for a free speech advocate who presumably is "not for limiting anyones speech" is a jolly poor show.

    • See 1 previous
    • EBFlex EBFlex on Apr 20, 2022

      "Perhaps I am wrong, but when someone says “The sky is never red” and then you show them a sunset, it is not a pivot. The pivot is the person shifting the argument, trying to claim that they never said what they clearly." Not analogous in the least. That's like saying if someone doesn't answer the phone, they are limiting the calling person's speech. I will stand by my claim, Musk has never limited someone's speech. You can use any sort of pretzel logic to try and disprove my assertion, but Mush has never limited anyone's ability to speak.

  • VoGhost Fantastic work by Honda design. When I first saw the pictures, I thought "Is that a second gen Acura NSX?"
  • V16 2025 VW GLI...or 2025 Honda Civic SI? Same target audience, similar price points. Both are rays of sun in the gray world of SUV'S.
  • FreedMike Said this before and I'll say it again: I'm not that exercised about this whole "pay for a subscription" thing, as long as the deal's reasonable. And here's how you make it reasonable: offer it a monthly charge. Let's say that adaptive headlights are a $500 option on this vehicle, and the subscription is $15 a month, or $540 over a three year lease. So you try the feature for a month, and if you like it, you keep it; if you don't, then you discontinue it, like a Netflix subscription. In any case, you didn't get charged $500 up front the feature. That's not a bad deal.In my case, let's say VW offers an over the air chip reflash that gives me another 25 hp. The total price of the upgrade is $1,000 (which is what a reflash would cost you in the aftermarket). If they offered me a one time monthly subscription for $50 to try it out, I'd take it. In other words, maybe the news isn't all bad.
  • 2ACL A good car, but - at least in this configuration -not one that should command a premium. Its qualities just aren't as enduring as those of Honda's contemporary sports cars. For better or worse, this is a formula they remain able to replicate.
  • Jalop1991 I just read that Tesla's profits are WAY down "as the electric vehicle company has faced both more EV competition from established automakers and a slowing of overall EV sales growth." This Cadillac wouldn't help Tesla at all, but the slowing market of EV sales overall means this should be a halo/boutique car. Regardless, yes, they should make it.