Elon Musk was reportedly vindicated late Friday Friday when a federal jury found that Tesla investors failed to prove that he derailed them with a 2018 tweet that he had "funding secured" to take the electric carmaker private, a deal that never materialized.
The nine-person jury arrived at the conclusion shortly after deliberations started, per a Wall Street Journal report.
The verdict was the culmination of a civil trial in San Francisco federal court, in which jurors heard testimony from high-profile witnesses including Musk himself, along with Tesla's former chief financial officer Deepak Ahuja, and Musk's former chief of staff Sam Teller.
Musk's defense highlighted his meeting in July 2018 with Yasir Al-Rumayyan, an official in Saudi Arabia's Private Investment Fund, in which he said Al-Rumayyan had committed to helping to finance the deal. Those verbal assurances in part led him to tweet that he had "funding secured" for a take-private deal for Tesla, he told jurors last month.
Nicholas Porritt of Levi & Korsinsky LLP, an attorney for Tesla's shareholders, had challenged that narrative. In closing arguments Friday, Porritt told the jury that a conversation over financing, which he estimated could be to the tune of $60 billion, would have had to at least be put in writing, yet Musk took no notes.
"Sometimes we substitute what we wished happened for what actually happened," Porritt argued in court. "That can happen when you're facing government investigations and lawsuits for billions of dollars."
Musk's tweet, which he posted in August 2018, read, "Am considering taking Tesla private at $420. Funding secured."
In closing arguments, Musk's attorney, Alex Spiro of Quinn Emanuel Urquhart & Sullivan, argued that Musk's adversaries had painted him as a "fire-breathing dragon" and that the billionaire couldn't be faulted for being a "bad Tweeter."
Before the trial, US District Judge Edward Chen had ruled that the billionaire's tweets should be considered "untrue," but that jurors had to decide if they were "material." In securities parlance, that meant jurors had to consider whether Musk's statements were significant enough to influence investors' trading choices.
Musk's statements about the potential deal also drew the attention of securities regulators, who in September 2018 extracted a $40 million penalty from Musk and the company, and said he could no longer helm Tesla's board.
Porritt, the Tesla investors' attorney, had framed the stakes of the case in sweeping, existential terms, arguing that it came down to a question of whether regular investors could trust the public markets.
"Whether it is the securities markets or a football game, rules must be fair and must be applied to everyone," he told the court on Friday. "And this case, ultimately, is about whether the rules that apply to everyone else should also apply to Elon Musk."
Gerard Filitti, senior counsel of The Lawfare Project, told Insider the verdict shows the jury took Musk at his word.
"This is a huge win for Musk, not so much because he is off the hook for potentially billions of dollars in damages, but because it reaffirms the public trust in him," Filitti said. "The jury's verdict can largely be attributed to their belief that as erratic and imperfect as Musk appears to be at times, he is ultimately well-intentioned and is not seeking to take advantage of people, least of all his investors."
