Elon Musk Liable for Twitter/X Investor Fraud, Jury Awards $2.7 Billion

A jury has found Elon Musk liable for defrauding investors by misleading them about his plans for Twitter, now known as X, prior to his $44 billion acquisition in October 2022. However, the jury did not find that Musk intentionally schemed to defraud investors.

The Lawsuit and Key Allegations

The civil trial, held in San Francisco, centered on a class-action lawsuit filed shortly before Musk took control of Twitter. Jurors were tasked with determining whether two tweets and comments made by Musk on a podcast in May 2022 constituted intentional misrepresentation to Twitter shareholders, who subsequently sold their shares based on his statements.

The core of the case revolved around Musk’s claims regarding the number of bot accounts on Twitter. Musk testified that Twitter had a significantly higher proportion of fake and spam accounts than the 5% disclosed in regulatory filings, using this as justification to attempt to withdraw from the purchase agreement. Elon Musk’s attempts to back out of the deal ultimately led to a court battle in Delaware, where Twitter sought to compel him to honor the original agreement. He eventually agreed to proceed with the purchase at the original price.

Jury Findings and Damages

After nearly four days of deliberation, the nine-person jury determined that Musk was liable for misleading investors with two specific tweets, including one stating the Twitter deal was “temporarily on hold.” However, they found he did not mislead investors with a statement made on a podcast and did not intentionally scheme to defraud them.

The jury awarded shareholders damages ranging from approximately $3 to $8 per stock per day, totaling around $2.1 billion in stock and an additional $500 million in options. As of March 21, 2026, Musk’s net worth is estimated at $814 billion, largely tied to his Tesla shares.

Reactions and Appeals

Mark Molumphy, an attorney for the plaintiffs, hailed the verdict as a significant victory for investors and the public markets, stating that it reinforces the principle that even wealthy and powerful individuals are subject to the law.

Musk’s legal team, Quinn Emanuel Urquhart & Sullivan, indicated their intention to appeal the decision. They pointed to recent appellate victories for Musk in other cases and characterized the current verdict as a “bump in the road.”

Transformations Under Musk’s Ownership

Since acquiring Twitter in October 2022, Musk rebranded the platform as X in July 2023, changing the domain name from twitter.com to x.com in May 2024. X now incorporates features such as long-form texts, account monetization, audio-video calls, integration with xAI’s Grok chatbot, job search functionality, and a subscription-based verification system. Several legacy Twitter features, including Circles, NFT profile pictures, and experimental pronouns in profiles, have been removed.

Musk has stated his ambition to transform X into a “digital town square” and an “everything app” similar to WeChat.

Previous Legal Battles

This is not the first time Musk has faced legal challenges related to his public statements. Three years prior, a jury acquitted him of wrongdoing in a case concerning his 2018 plans to take Tesla private at $420 per share.

Monte Mann, a business litigation lawyer, noted that the verdict underscores the legal consequences of influencing the market with public statements, particularly given the speed and scale at which information can now spread.