Jury Finds Elon Musk Liable for Misleading Twitter Investors, Faces Billions in Damages

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San Francisco: A U.S. federal jury in California has found Elon Musk liable for misleading shareholders of Twitter in 2022, potentially exposing him to damages of up to $2.6 billion.

The class-action lawsuit, filed by investor Giuseppe Pampena on behalf of shareholders, alleged that Musk made statements that influenced the company’s stock price while negotiating his $44 billion acquisition of the platform.

Jurors concluded that some of Musk’s public comments, including posts on social media, violated securities rules by prompting investors to sell shares at lower prices. The case focused on remarks related to the number of fake accounts on Twitter and a post suggesting the takeover was “temporarily on hold.”

While the jury found that two of Musk’s tweets misled investors, it did not conclude that he engaged in a broader scheme to defraud. Statements made during podcast appearances were deemed opinions rather than actionable claims.

Plaintiffs argued that Musk’s comments were intended to push down Twitter’s share price to renegotiate the deal or potentially walk away, leading to financial losses for investors who sold shares between May and October 2022. The jury agreed that his actions contributed to those losses.

During the trial, Musk maintained that his concerns about spam and fake accounts were genuine and denied any intention to manipulate the market. He acknowledged the risks associated with his public statements but said he did not expect them to significantly impact the stock price.

The legal dispute began after Musk attempted to withdraw from the acquisition, prompting Twitter to file a lawsuit in Delaware to enforce the agreement. He later proceeded with the deal, completing the acquisition in late 2022. The platform has since been rebranded as X.

Damages have yet to be finalised, but the jury indicated compensation could run into billions, based on losses incurred by shareholders during the period in question.

The case underscores increasing scrutiny on market-moving statements by high-profile figures and reinforces accountability under U.S. securities laws.