Elon Musk Found Liable for Misleading Twitter Investors

A U.S. Federal jury has found Elon Musk liable for defrauding investors by deliberately driving down Twitter’s stock price in the months leading up to his $44 billion acquisition of the social media company in 2022. Even as the jury did not find Musk guilty of a broader scheme to defraud, the verdict marks a significant legal setback for the billionaire.

The Case Against Musk

The civil class action lawsuit, filed by a group of Twitter shareholders in October 2022, alleged that Musk made false and misleading statements, particularly through his tweets, suggesting the deal to purchase Twitter might not travel through. Plaintiffs argued that these statements caused the stock price to decline, and they sold their shares at a loss, missing out on the eventual acquisition price. CNN reports that the trial forced Musk to testify and defend his actions during the tumultuous takeover process.

Jury’s Findings

The jury determined that Musk misled investors, but they absolved him of claims that he engaged in a deliberate “scheme” to defraud them. The Associated Press detailed the verdict, noting the distinction between misleading statements and a calculated scheme.

Potential Damages

The damages awarded by the jury are estimated to be around $2.5 billion, dependent on the number of shareholders who submit claims to be part of the class action. CNN reported this estimate, citing attorneys for the plaintiffs. Reuters also covered the potential financial implications of the verdict.

Legal Representation

Mark Molumphy, an attorney for the plaintiffs, stated the verdict is believed to be the largest securities jury verdict in United States history. CNN quoted Molumphy’s statement following the jury’s decision.

Timeline of Events

• April 2022: Musk initially agreed to purchase Twitter for $44 billion.
• October 2022: Twitter shareholders filed a class action lawsuit against Musk.
• March 4, 2026: The trial began at the U.S. District Court for the Northern District of California in San Francisco. AP News provided images from the courtroom during the trial.
• March 20, 2026: The jury found Musk liable for misleading investors.

Looking Ahead

The verdict represents a significant outcome in the legal battle surrounding Musk’s acquisition of Twitter (now X). The final amount of damages will be determined as shareholders submit their claims. This case highlights the legal risks associated with public statements made by corporate leaders, particularly during major transactions.