Elon Musk’s Twitter Takeover Trial: Jury Deliberates on Securities Law Violations

SAN FRANCISCO – A San Francisco jury is currently deliberating whether Elon Musk violated securities law during his $44 billion acquisition of Twitter, now known as X, in 2022. The trial, which concluded with closing arguments on Tuesday, centers on allegations that Musk deliberately misled investors about the number of spam bot accounts on the platform, impacting the company’s stock price.

The Lawsuit and Allegations

Investors, led by plaintiffs Steve Garrett, Nancy Price, John Garrett, and Brian Belgrave, filed a class-action lawsuit in October 2022. They claim they suffered significant financial losses due to Musk’s statements regarding spam bot accounts. The core argument is that Musk intentionally misrepresented the prevalence of these accounts to either back out of the acquisition deal or renegotiate a lower price.

Key Statements Under Scrutiny

The lawsuit focuses on several public statements made by Musk. These include a tweet from May 13, 2022, stating the deal was “on hold” pending verification that spam/fake accounts represented less than 5% of users. He followed up with a tweet affirming his continued commitment to the acquisition. Further scrutiny is given to statements made at a conference where Musk claimed spam and fake accounts comprised at least 20% of Twitter users, and a tweet featuring a poop emoji in response to then-Twitter CEO Parag Agrawal’s assertion that calculating bot numbers externally was impossible.

Musk also tweeted that his offer to buy Twitter was contingent on the accuracy of the company’s SEC filings, and that the deal would not proceed without evidence supporting a bot count under 5%.

Trial Testimony

Over the two-week trial, the jury heard testimony from former Twitter senior leaders, bankers from Morgan Stanley and Goldman Sachs involved in the transaction, and legal representatives from both Musk and Twitter. Musk himself testified on March 4th, maintaining that his concerns about bot prevalence were genuine and that he did not intentionally manipulate Twitter’s stock price.

Closing Arguments: Investor Perspective

Attorney Mark Molumphy, representing the investors, argued that Musk prioritized his financial interests over transparency. He likened Musk’s actions to a pattern of making promises he didn’t intend to retain, “trashing the executives, he trashed the company, he trashed the stock, then he fled the scene.” Molumphy asserted that Musk deliberately downplayed the bot issue when it suited him and exaggerated it when he sought to renegotiate or abandon the deal.

Closing Arguments: Defense Perspective

Michael T. Lifrak, representing Musk, countered that Musk’s concerns about bot accounts were legitimate and predate the acquisition agreement. He argued that Musk genuinely sought information from Twitter regarding their bot calculation methodology but was denied access to the necessary data. Lifrak emphasized that “tweeting is not securities fraud” and that the investors failed to prove a deliberate scheme to drive down the stock price.

The Core Question for the Jury

The central question for the jury is whether Musk’s statements were intentionally misleading and whether those statements caused financial harm to the investors. Molumphy urged the jury to hold Musk accountable, stating that individuals should be truthful when speaking about the securities market. Lifrak cautioned the jury against letting personal feelings about Musk influence their decision.

Current Status

As of Wednesday, March 18, 2026, the jury is deliberating the case before U.S. District Judge Charles R. Breyer. The outcome of the trial could have significant implications for future acquisitions and the responsibilities of high-profile individuals regarding public statements about company valuations.