A federal judge dismisses Elon Musk lawsuit bid to overturn a Twitter fraud verdict, denying decertification and granting investors prejudgment interest.
A federal judge dismisses Elon Musk lawsuit challenge over a jury verdict that found the world's richest man defrauded Twitter investors during his 2022 takeover of the social media company, even as the same ruling cleared him on one specific tweet at issue in the case.
Key Takeaways
- U.S. District Judge Charles Breyer in San Francisco refused to throw out the jury's fraud verdict against Musk.
- Musk was found not liable over one of the tweets investors had challenged.
- Breyer denied Musk's request to decertify the class of investors bringing the case.
- The judge sided with investors on their request for prejudgment interest.
- The ruling came down on Monday, July 6, according to court filings.
What the Judge Actually Decided
Breyer's order addressed several moving pieces at once. Musk had asked the court to set aside the jury's verdict entirely, arguing the outcome should not stand. The judge declined, leaving intact the core finding that Musk defrauded investors in Twitter, now rebranded as X, when he was buying up shares ahead of his eventual purchase of the company. At the same time, Breyer found Musk was not liable for one particular tweet that had been part of the investors' case, a partial win for Musk even as the broader verdict held.
Class Status and Interest Payments
Musk's legal team also tried to unravel the case by asking the judge to decertify the class of investors who had joined the lawsuit. Breyer rejected that motion too, meaning the group of investors remains intact as a single class for purposes of the litigation. On top of that, the judge granted the investors' request for prejudgment interest, a decision that effectively increases what they stand to collect by accounting for the time that has passed since the alleged fraud occurred.
Why This Case Traces Back to the Twitter Deal
The lawsuit centers on conduct tied to Musk's roughly 44 billion dollar acquisition of Twitter, a deal that closed in October 2022 after months of public back and forth. Investors argued that Musk's statements and delayed disclosures around his stock purchases in the company misled shareholders and cost them money. A jury ultimately agreed, at least in part, setting the stage for the post trial motions Breyer just ruled on.
What Happens Now That the Verdict Stands
With the verdict upheld and the class certified, the case moves forward on the financial terms set by Breyer's order, including the added interest owed to investors. Musk still has avenues to appeal, and how his legal team responds to this setback will shape whether the dispute drags into further proceedings or heads toward resolution.
