New trial of Elon Musk for fraud begins in San Francisco

Elon Musk est la cible d'un nouveau procès à San Francisco

Posted Jan 17, 2023, 10:26 PMUpdated on Jan 17, 2023 at 10:29 PM

Elon Musk’s troubles continue. After his legal disputes with Twitter, a new trial began on Tuesday in San Francisco, against [[https://www.lesechos.fr/industrie-services/automobile/tesla-affiche-une-production-record-2022-mais-manque-de-peu-ses-objectifs-1893354|le patron de Tesla]], accused by investors of having manipulated the share price of his car company, through a series of tweets on the social network.

The case dates back to August 2018, when Elon Musk announced on Twitter his intention to take Tesla out of the stock market. Messages that had strongly oscillated the action for a few days. “Plaintiffs claim that these tweets were factually false and artificially affected Tesla’s stock price and other securities,” Judge Edward Chen summed up for potential jurors.

A first disappointment

The case seems all the worse for Elon Musk as his lawyers have already suffered a small defeat even before the start of the trial. Unable to avoid the trial, the billionaire’s lawyers have indeed tried, in vain, to obtain his transfer to a jurisdiction other than that of San Francisco, deemed hostile to the interests of their client. But this Friday, the magistrate refused to transfer the prosecution to Texas, where Elon Musk moved Tesla’s headquarters.

The defense argued that the multi-billionaire could not benefit from an impartial trial in San Francisco, where he bought Twitter in late October, and was widely criticized for his decisions, from the platform’s content moderation policy to mass layoffs.

A hostile climate

“In recent months, local media have saturated this district with biased and negative stories about Mr. Musk,” the lawyers argued in a motion. “The local press, contrary to its usual way of covering (the redundancy plans), personally blamed Mr. Musk for the job cuts and even accused him of breaking the law. Local elected officials, including the mayor of San Francisco, participated in protests against him,” they said.

Wasted effort. Edward Chen, on the contrary, estimated on Friday that an impartial jury could be constituted in the Californian city. In a previous decision related to this case, the judge had already considered that the famous 2018 tweet could be considered “false and misleading”.

Repeat again

The trial is scheduled to last three weeks, and Elon Musk is on the witness list. The short messages from the boss of Tesla have already earned him numerous disputes with the authorities. The American stock market policeman, the SEC, had also filed a complaint at the time, believing that Elon Musk had not provided proof of his financing. The regulator then forced him to hand over the chairmanship of Tesla’s board of directors, pay a $20 million fine and later demanded that his tweets directly related to Tesla’s activity be pre-approved by a lawyer. competent.

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[[https://www.lesechos.fr/finance-marches/marches-financiers/tesla-il-y-a-de-lelectricite-dans-lair-1898008|Tesla, il y a de l’électricité dans l’air]]

[[https://www.lesechos.fr/industrie-services/automobile/le-spectaculaire-et-inattendu-krach-de-tesla-1891917|Le spectaculaire et inattendu krach de Tesla en Bourse]]

This new legal episode falls all the more badly for Elon Musk as the price of Tesla has already suffered a real [[https://www.lesechos.fr/finance-marches/marches-financiers/le-krach-de-tesla-fait-la-fortune-des-traders-vendeurs-a-decouvert-1894140|effondrement en bourse]]last year, losing almost 65% of its value compared to the start of 2022. The electric car manufacturer, once a darling of Wall Street, saw its valuation drop from more than 1,000 billion dollars in October 2021 to less than 400 billion in December. Since then, the manufacturer has been trying painfully to go up the slope, [[https://www.lesechos.fr/industrie-services/automobile/automobile-tesla-lance-la-guerre-des-prix-en-europe-1896749|en cassant les prix]]in an attempt to boost its sales.

To this bad patch is added the rather negative impact of the takeover of Twitter for the image of Elon Musk and his fortune. Last December, the emblematic businessman, whom nothing seemed to resist, was even booed live by the public on the set of a television program. In California too, trouble flies in squadrons.