Elon Musk's bid to overturn Twitter fraud verdict rejected by US judge

In a major court ruling a U.S. judge on Monday rejected Elon Musk’s attempt to set aside a fraud verdict related to his dealings involving 'X' formally 'Twitter'.

Judge rejected Musk's bid to void a jury verdict finding that the world's richest person defrauded Twitter investors by trying to ‌drive down the social media company's stock price after agreeing to a $44 billion takeover.

In response, Musk had asked the court to overturn the verdict, arguing that it should be dismissed. However, the judge denied the request, finding no sufficient basis to invalidate the previous decision.

Simultaneously the U.S. District Judge Charles Breyer in San Francisco also denied Musk's motion to decertify the class of investors, and granted the investors' motion for prejudgment interest.

By rejecting Musk's bid to throw out that verdict, the judge has officially cleared the way for the multi-billion dollar class-action payout to proceed.

The judge did, however, find Musk not liable for one of his challenged tweets while the decision still means that the earlier ruling against him remains in place.

A lawyer for the investors had estimated following the March 20 verdict that damages could total about $2.5 billion.

Other cases against Musk

Musk also faces a lawsuit in Manhattan claiming he defrauded Twitter investors by waiting too long to disclose his initial investment, letting him buy shares cheaply and causing them to sell at low prices.

A San Francisco jury found Musk liable for securities fraud after he posted tweets in May 2022 claiming the Twitter acquisition was "temporarily on hold" over spam bot counts—a move the jury ruled was a deliberate, misleading attempt to tank Twitter's stock price to force a cheaper renegotiation.

Jurors found Musk liable for May 13 and May 17, 2022, tweets in which he questioned whether Twitter was overrun by fake and spam accounts, known as "bots."

The May 13 tweet said the purchase was "on hold" pending details on whether bots represented less than 5% of users, while the May 17 tweet said the purchase "cannot move forward" until Twitter's chief executive proved the percentage was under 5%.

Breyer found "substantial evidence of falsity" in the May 13 tweet, and said "a jury could conclude that Musk had a motive to get out of the existing deal and used bots as a pretext to do so."

Investors said Musk did this to force Twitter to renegotiate his ‌offer, or let him back out. They also claimed the first tweet caused Twitter's share price to fall 18% over two trading days, causing losses when they sold their shares at depressed prices.

Elon Musk rebranded Twitter in 2023 and named it as 'X.' Additionally, now 'X' is also part of his rocket and satellite company 'SpaceX'.