Elon, Tesla Cleared of Liability Over ‘Funding Secured’ Tweet

In a major legal victory for Tesla and its CEO Elon Musk, a U.S. appeals court has upheld a jury’s decision to clear them of liability over Musk’s infamous 2018 “funding secured” tweet.

The ruling marks the end of a long-running legal saga that began when Tesla shareholder Glen Littleton filed a lawsuit in 2018 alleging that Musk’s tweet was misleading and had caused significant financial losses for investors.

The tweet had resulted in substantial volatility for Tesla’s stock and led to Musk and the company paying a combined fine of $40 million.

However, after the case went to trial in 2023, the jury sided with Musk and Tesla, finding them not liable.

Littleton’s legal team subsequently appealed the verdict, arguing that the judge’s instructions to the jury were flawed.

But in a unanimous decision, the three-judge panel of the San Francisco-based 9th U.S. Circuit Court of Appeals has now rejected the plaintiffs’ appeal.

While the court acknowledged that Musk’s tweet may have been reckless, it determined that the key question of whether the CEO acted knowingly was still relevant in deciding how to apportion any potential damages.

“Because the district court found that Musk had, at a minimum, tweeted recklessly, the jury did not need to consider knowledge for the scienter element of Littleton’s Rule 10b-5 claim. But knowledge was implicated at another stage of the case: apportionment,”

the court wrote in its decision.

Ellyde Thompson, one of the lawyers representing Musk and Tesla, welcomed the appeals court’s ruling, calling it a “significant legal victory” for the defendants.

Littleton’s legal team has not yet issued a comment on the matter.

The appeals court’s decision brings an end to the long-running legal battle and affirms the original jury’s finding that Musk and Tesla did not deliberately mislead investors with the “funding secured” tweet.

This is a major win for Musk and Tesla, who have been under intense scrutiny over the incident for several years.