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The investors took specific aim at comments Musk made during a TED event last week in Vancouver. He said “I was forced to concede to the SEC unlawfully” and settle the agency’s lawsuit over the 2018 “funding secured” tweet.
Shareholders argue that Musk’s “indisputably false” August 2018 tweet and follow-up posts on Twitter cost them billions of dollars amid wild swings in Tesla’s stock price, while Musk’s lawyers countered that the post to his millions of followers was “entirely truthful.”
To fend off allegations that the missive was fraudulent, Musk’s lawyers have stood by their argument that Saudi Arabia’s sovereign wealth fund had agreed to support his attempt to take Tesla private.
Lawyers for the shareholders said Chen was “explicit and unambiguous” in siding with them in the judge’s April 1 order finding the August 2018 tweet to be false.
The judge concluded Musk “recklessly made the statements with knowledge as to their falsity,” the lawyers said in the Friday filing.
Nicholas Porritt, an attorney for the plaintiffs, said the judge’s order wasn’t issued publicly and was shared with the parties on April 12.
“Because it refers to evidence that defendants regarded as confidential, the court preliminarily filed the order under seal while the parties agree what portions, if any, need to stay under seal,” Porritt said in an email.
Court officials couldn’t immediately be reached to confirm the judge’s order.
The case is entitled Tesla Inc. Securities Litigation, 18-cv-04865, U.S. District Court, Northern District of California (San Francisco).
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