US jury finds Elon Musk misled Twitter shareholders

A federal jury in California has found that Elon Musk misled Twitter shareholders in 2022, ruling in favor of a class-action securities lawsuit. The verdict, delivered on Friday, concludes that the world’s wealthiest individual used false and misleading statements to artificially drive down the company's stock price while he was in the process of acquiring the platform in a $44 billion deal. As a result of the jury's calculations, Musk could be ordered to pay up to $2.6 billion in damages to affected investors.

The lawsuit was spearheaded by Giuseppe Pampena on behalf of investors who sold their Twitter shares between mid-May and early October 2022. The civil complaint alleged that Musk deliberately manipulated market sentiment to gain leverage, either to renegotiate a lower purchase price or to find a way to exit the deal entirely. Jurors ultimately agreed that these actions violated federal securities rules, which strictly prohibit statements intended to fluctuate a stock's price through misinformation.

Central to the case were Musk's public statements on social media, including a high-profile tweet claiming the acquisition was "on hold." At the time, Musk argued that Twitter executives needed to prove that the percentage of "bots"—automated accounts—was as low as the company officially claimed. The prosecution successfully argued that these tactics caused significant financial losses for shareholders who sold their positions during the period of artificially induced price volatility.

The legal battle over the acquisition originally reached a tipping point in late 2022 when Twitter sued Musk to force him to uphold his original contract. Musk eventually completed the purchase and has since undergone a massive restructuring of his business empire. He recently merged the social media platform, now rebranded as X, with his artificial intelligence venture, xAI, and his private aerospace firm, SpaceX.

This verdict represents a significant legal setback for Musk regarding his regulatory and disclosure obligations. While the $2.6 billion figure is based on the jury's initial findings, the final judgment and potential appeals process will determine the ultimate financial impact on the billionaire. The case serves as a high-stakes reminder of the legal ramifications for corporate leaders whose public communications are found to have a deceptive influence on the stock market.