- A group of Tesla shareholders is suing Elon Musk over his infamous ‘Funding Secured’ tweet.
- Shareholders asked a judge for a gag order to prevent Musk from speaking publicly about the case.
- In a decision on Wednesday, the judge said shareholders could not gag Musk.
Tesla CEO Elon Musk, no stranger to speaking his mind, has pushed back on a proposed ‘gag order’ that would have prevented him from speaking publicly about a fraud lawsuit based on his sadly famous “funding secured” tweet.
Tesla CEO Musk tweeted in August 2018 that he had “secure funding” to take the electric carmaker private. He later paid $20 million as part of a settlement with the U.S. Securities and Exchange Commission, which said the tweet was “misleading.”
A group of Tesla shareholders said in a lawsuit that Musk defrauded investors with the tweet, saying it was a “ill-conceived attempt to manipulate Tesla’s stock price upwards in order to to burn investors who had shorted Tesla stock”.
The gag order against Musk was filed by shareholders’ attorneys shortly after Musk discussed his “funding secured” tweet in an April 14 TED interview. During the interview, Musk said “funding was actually secure.”
In a filing released Friday, seen by Insider, attorneys for the shareholders say Musk’s comments to the media about the lawsuit could “poison the jury” and influence its outcome. The trial is due to begin in January 2023.
A filing submitted Wednesday by Musk’s attorneys, seen by Insider, says the proposed gag order “would trample Elon Musk’s First Amendment rights.”
In a ruling released Wednesday, Judge Edward Chen ruled in favor of Musk.
Chen said that although the court had already ruled that Musk’s 2018 claims that the funding had been secured were false, Musk’s comments during his TED interview were consistent with arguments the Tesla CEO had previously made. in the shareholder suit.