Photographer: Patrick T. Fallon/Bloomberg

Legal conundrum at the forefront

Elon Musk must face a lawsuit over stock-price manipulation filed by the SEC in 2018, with no trial date set.

Remember back in August ’18 when Musk tweeted about taking Tesla private?[5] This particular tweet is making headlines again.  California District Judge Edward Chen ruled on Wednesday that the Tesla CEO must face a lawsuit alleging that Musk misled shareholders and deliberately attempted to manipulate the company’s stock price through that announcement.

Several investors have argued that this tweet was an attempt by Musk to squeeze out short-sellers that were betting on a decline of Tesla’s stock price, in order for them to make a loss from this operation. The company’s shares went up 13% following Musk’s tweet[6]. The Lawsuit, filed on September 29 2018, names the Security and Exchange Commission as plaintiff[7].

 

[5]https://twitter.com/elonmusk/status/1026872652290379776?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1026872652290379776&ref_url=https%3A%2F%2Ffinance.yahoo.com%2Fnews%2Fceo-elon-musks-taking-tesla-073326204.html

[6]https://finance.yahoo.com/news/ceo-elon-musks-taking-tesla-073326204.html

[7]https://www.sec.gov/litigation/complaints/2018/comp-pr2018-219.pdf

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