SAN FRANCISCO, MAR 21: A US federal jury has found Elon Musk liable for defrauding investors by deliberately trying to drive down Twitter’s stock price in the months before his 2022 takeover of the social media company for $44 billion. However, the same jury cleared him of the broader accusation that he orchestrated a full‑blown fraud “scheme” to mislead shareholders.
The civil trial in San Francisco revolved around a class‑action lawsuit filed just before Musk took control of Twitter, which he later rebranded as X. Plaintiffs argued that two tweets and a podcast comment Musk made in May 2022 misled investors and caused them to sell their shares at lower prices. The nine‑member jury, after nearly four days of deliberation and about three weeks of trial, decided that Musk did mislead investors with two tweets – including one where he said the Twitter deal was “on hold” and that he was seeking data on fake accounts – but did not commit fraud via his podcast remarks, which were treated as opinion.
The jurors awarded Twitter shareholders roughly $3 to $8 in damages per share per day, an amount that the plaintiffs’ lawyers estimate at about $2.1 billion in stock losses plus another $500 million tied to options. Musk’s lawyers have said they will appeal, describing the verdict as a “bump in the road” and noting that he recently won significant appellate victories in other cases. Plaintiffs’ attorney Mark Molumphy called the outcome an important win for investors and the broader public markets, underscoring that even powerful figures must follow securities laws.
Much of the trial focused on Musk’s repeated claims that Twitter had far more bots than the roughly 5% it disclosed in regulatory filings, and that its leadership was hiding the true scale of fake accounts. Musk testified that he believed Twitter’s figures were essentially “BS” and that he used that argument to justify walking away from the deal. When Twitter pushed back in court, he eventually reversed course and agreed to pay the original $44‑billion price, but the damage to the stock price had already driven down the value of shares held by investors who sold during the uncertainty.
Analysts and lawyers outside the case said the verdict sends a strong message that executives who move markets with their public statements – especially on social media – must be prepared to face liability if their comments are found to be misleading.
