Elon Musk was found liable for intentionally misleading Twitter shareholders during his $44 billion acquisition of the social media platform in 2022, when Musk tweeted the deal was “temporarily on hold,” according to multiple media reports.
A California civil jury in the Pampena v. Musk case found the tweet caused Twitter’s overall value to drop by nearly 10% and stocks to plummet by as much as 20%. Musk could be responsible for up to $2.6 billion in damages.
At the time, Musk insisted his concern was about the number of bots and fake accounts that appeared on the platform. Former shareholders believed he was attempting to lower the price of shares to his advantage.
Joseph Cotchett, the legal representation for the group of shareholders, told CNBC, “This is a great example of what you cannot do to the average investor — people that have 401ks, kids, pension funds, teachers, firemen, nurses. That’s what this case was all about. This was not about Musk. It was about the whole operation.”
Musk’s lawyer Quinn Emanuel told the outlet, “We view today’s verdict, where the jury found both for and against the plaintiffs and found no fraud scheme, as a bump in the road. And we look forward to vindication on appeal.”
TheWrap has requested comment from the offices of Cotchett and Emanuel.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted in May 2022.
The tweet was an apparent reference to an earlier story about a regulatory filing that appeared to indicate bots and spam accounted for fewer than 5% of the then-229 million daily active users.
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