Jury finds Elon Musk misled investors during Twitter purchase, absolves him of some fraud claims

A jury has found Elon Musk liable for misleading investors by deliberately driving down Twitter’s stock price in the tumultuous months leading up to his 2022 acquisition of the social media company for $44 billion. However, the jury absolved him of some fraud allegations, determining that he did not “scheme” to mislead investors.

The civil trial, held in San Francisco, centered around a class-action lawsuit filed just before Musk took control of Twitter, which he later renamed X. Jurors were asked to decide whether two tweets and comments Musk made during a May 2022 podcast amounted to intentional fraud against Twitter shareholders who sold their shares based on Musk’s statements.

After nearly four days of deliberation and nearly three weeks since the trial began on March 2, the nine-person jury delivered their verdict. They concluded that while Musk was liable for misleading investors with two tweets—including one stating the Twitter deal was “temporarily on hold”—he did not do so with a statement made on the podcast, which they ruled was an opinion. Furthermore, the jury found that Musk did not intentionally “scheme” to defraud investors.

The jury awarded shareholders damages ranging from about $3 to $8 per stock per day. Plaintiffs’ lawyers estimate this amounts to approximately $2.1 billion. Musk’s fortune is currently valued at about $814 billion, much of it tied up in Tesla shares.

“It’s an important victory, not just for investors of Twitter, but for the public markets,” said Joseph Cotchett, an attorney representing the plaintiffs. “I think the jury’s verdict sends a strong message that just because you’re a rich and powerful person, you still have to obey the law, and no man is above the law.”

Musk’s lawyers declined to comment as they left the courtroom.

### Focus on Bot Account Claims

Much of the trial scrutinized Musk’s claims regarding the number of bots on Twitter. Musk testified that Twitter had a much higher number of fake and spam accounts than the roughly 5% disclosed in regulatory filings. He cited what he described as Twitter’s misrepresentation of fake account numbers as a rationale for attempting to back out of the purchase.

Following Musk’s attempt to withdraw from the deal, Twitter filed a lawsuit in Delaware aiming to force him to honor the original agreement. Just before that case was scheduled to go to trial, Musk reversed course again and agreed to complete the acquisition at the original agreed price.

### The Central Issue: Misleading Tweets

At the heart of the case was whether Musk’s tweets—particularly one on May 13, 2022, declaring the Twitter deal “temporarily on hold” while seeking more information on fake account numbers—constituted a deliberate scheme to tank Twitter’s stock price.

The jury found that Musk did mislead investors with two tweets, but the podcast statement was opinion-based and not fraudulent. They also cleared Musk of the charge that he intended to scheme to drive down the stock.

### Trial Proceedings and Testimonies

The nearly three-week trial took place in the U.S. District Court for the Northern District of California and featured testimony from former Twitter executives including CEO Parag Agrawal and CFO Ned Segal. Musk himself testified for over a day.

During his testimony, Musk maintained that Twitter’s leadership lied about the number of bots on the platform and withheld information regarding how those counts were calculated.

“I did make it clear that I thought it was BS,” Musk said regarding Twitter’s claim that only about 5% of its accounts were bots.

Musk also asserted that by ultimately proceeding with the acquisition at the original price, he delivered a significant financial benefit to most Twitter shareholders.

However, Twitter’s stock price fell below $33—about 40% below Musk’s purchase price—during the period when the deal was uncertain. The plaintiffs argued this decline was caused by Musk’s misleading statements, resulting in losses for shareholders who sold during that time.

“I can’t control whether people sell their stock, but everyone who held the stock fared extremely well,” Musk said.

### Plaintiffs’ Arguments

The plaintiffs argued that as Tesla’s stock price declined and the Twitter acquisition became increasingly costly for Musk, he posted tweets aimed at driving down Twitter’s stock price, hoping to renegotiate the deal at a lower price or to entirely exit the transaction.

“These tweets were not just innocent mistakes or impulsive comments,” said plaintiffs’ attorney Mark Molumphy. “They were carefully calculated moves to depress Twitter’s stock.”

In his closing arguments, Molumphy urged jurors to hold Musk accountable and compensate thousands of investors who lost money due to tweets Musk sent, including the May 13, 2022, tweet stating the deal was “on hold.”

“He knew what he was doing,” Molumphy concluded.

### Defense Motions and Past Litigation

Musk’s lawyers sought a mistrial multiple times during the contentious proceedings, arguing that the Tesla CEO could not receive a fair trial in San Francisco due to local public animosity toward him.

This case is not Musk’s first courtroom battle over social media posts. Three years prior, he testified for approximately eight hours in a San Francisco federal trial regarding his plans to take Tesla private at $420 per share in a proposed 2018 deal that never materialized. In that case, a nine-member jury cleared Musk of wrongdoing.

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This verdict highlights the ongoing scrutiny over Musk’s use of social media and its impact on investors, reaffirming that wealth and power do not exempt one from legal accountability.
https://www.latimes.com/business/story/2026-03-20/jury-finds-elon-musk-misled-investors-during-twitter-purchase-absolves-him-of-some-fraud-claims