A federal judge on Friday rejected an offer from Tesla CEO Elon Musk to move or delay the lawsuit over a misleading tweet a couple of potential buyout of the electrical automobile maker, setting the stage for a mercury billionaire to be drawn into legal drama amidst confusion on his Twitter takeover .
The choice was made by U.S. District Judge Edward Chen during a hearing held in federal court in San Francisco to discuss the ultimate details of the trial, which is about to begin Tuesday with jury selection.
Musk’s attorneys last week asked Chen to move the lawsuit to federal court in Texas, where Tesla is moving its headquarters in 2021, arguing that Musk’s negative coverage since his $44 billion purchase of Twitter in October poisoned a jury within the San Francisco Bay Area.
But Chen dismissed those concerns on Friday and expressed confidence that a panel of impartial jurors may very well be drawn from a region home to hundreds of thousands of individuals. He also noted that a jury had been arrange to try the highly publicized criminal trial of former Theranos CEO Elizabeth Holmes, whose transformation from Silicon Valley star to accused fraudster was the topic of an HBO documentary and book before the proceedings began in nearby San José, California..
Holmes, 38, now faces greater than 11 years in federal prison for investor fraud and conspiracy.
Musk’s upcoming lawsuit revolves around a civil lawsuit filed on behalf of Tesla shareholders who claim they were deceived by an August 7, 2018 tweet wherein he indicated he had arranged financing for Tesla’s buyout – a deal that never materialized and led to 40 million dollar settlement with US securities regulators.
Chen has already determined that the tweet about Musk’s buyout was fake, leaving it up to the jury to resolve whether he posted it recklessly and whether it caused financial harm to Tesla shareholders. Adjusting for 2 stock splits made since 2018, Tesla shares are actually value almost six times what they were on the time of Musk’s fake buyout tweets.
Tesla stock was value much more before Musk decided to buy Twitter at a price that even he admitted was much higher than the corporate’s value. Tesla shares, which currently hover around $120, have lost nearly half their value since Musk took control of Twitter, partly fueling investor concerns that he’s spending an excessive amount of time running his private Twitter slightly than specializing in the automaker chargeable for most of his fame and wealth in some unspecified time in the future faces stiffer competition.
Musk, 51, has said he’ll step down as Twitter CEO as soon as he finds a substitute, but has not set a timeline for the handover. To assist reduce Twitter’s losses and reduce the massive debt resulting from the acquisition, Musk has laid off about half of the corporate’s staff and is facing allegations of refusing to pay rent at some offices.
Media coverage of mass layoffs and other cutbacks on Twitter was one in every of the fundamental reasons Musk’s lawyer Alex Spiro advocated moving the trial or at the least delaying it until the backlash against the cruel measures had died down.
But lawyers representing Tesla shareholders within the case He argued that Musk had only himself to blame for any negative feedback, mainly due to his frequent activity on Twitter, the social media platform he currently owns and runs.
“For higher or for worse, Musk is a celeb who attracts media attention all over the world,” the shareholders’ attorneys wrote in a 19-page objection to the transfer request. “His Twitter footprint alone is partly to blame for this. If “negative” attention were all that was needed to disqualify the jury, Musk can be virtually unbeatable in front of the jury given his knack for attracting “negative” coverage.
After reviewing some 200 questionnaires sent in by jurors earlier this week, Spiro argued that many contained derogatory remarks about Musk that emphasized how difficult it will be for him to get a good trial.
A few of these unflattering remarks got here during Friday’s hearing as Chen reviewed questionnaires in preparation for Tuesday’s jury selection. The judge disqualified the jurors, who he said variously described Musk as an “idiot” and a “clown”.