Judge rejects gag order in Elon Musk case in 2018

DETROIT (AP) — A federal judge in California has denied a request by shareholders in a lawsuit to force Elon Musk to stop talking about his 2018 tweets in which he said he had the funding to take Tesla private.

U.S. District Judge Edward Chen’s ruling on Wednesday came just hours after Tesla’s CEO’s lawyer filed a document in the case that said the nondisclosure order trampled on Musk’s free speech rights.

Shareholder lawyers say Musk is trying to sway potential jurors before the lawsuit goes to court on Jan. 1. 17. The lawsuit alleges that the CEO’s August 2018 tweets were written to manipulate Tesla’s share price, costing shareholders money.

Chen confirmed in an order Wednesday that he ruled that Musk 2018 tweets about Tesla having money to take Tesla private at $420 per share were false.

But he wrote that one of the shareholders who sought a ban on silence in a class action lawsuit could not prove his case. Chen wrote that the trial has been rescheduled for early next year, and that the publicity during or just before the trial is of great concern. He also wrote that the jury would be assembled from a large metro area and that Musk’s comments were consistent with the public position in another related court case.

Lawyers for the plaintiffs also argued that Musk violated an October 2018 court agreement with U.S. securities regulators. Musk signed an agreement to pay a $20 million fine and not make any statements to refute allegations of securities fraud. Musk disputes the agreement, saying it is unconstitutional.

The decision comes about a week after Musk, the world’s richest man, made a controversial offer to acquire Twitter and turn it into a private company with a $43 billion offer, equal to $54.20 per share. Twitter The board on Friday took a “poison pill” a strategy that would make Musk’s stock purchase prohibitively expensive.

We are talking about an interview with Musk from April 14 at the TED 2022 conference, in which he said that he had funding to privatize Tesla in 2018. will stop providing capital if it doesn’t, and Tesla in Austin, Texas will go bankrupt.

Shareholder lawyers say Musk’s comments in the interview were “an elusive attempt to justify himself before the court of public opinion” about misrepresentations he made in August. 7, 2018 tweets.

But Musk’s attorney, Alex Spiro, wrote in his response that shareholders failed to demonstrate that Musk’s speech posed a “clear and visible danger” that the entire community would be corrupted by pre-trial publicity or that it would be impossible to find 12 unbiased jurors.

His petition says that Musk is in the process of a public offering to acquire Twitter, leading to debate over censorship. He wrote that journalists compared this to Musk’s previous statements about Tesla’s privatization.

During a TED interview, Musk was asked if the funding for the Twitter deal had been secured, referring to Tesla tweets from 2018. “Mr. Musk should be allowed to meaningfully and truthfully respond to requests like this rather than be forced to remain silent,” Spiro wrote.

If Musk violated the SEC agreement, the agency could ask a judge to overrule it and reinstate the securities fraud complaint. The Securities and Exchange Commission did not comment.