A federal jury in San Francisco on Friday found Elon Musk liable for misleading Twitter shareholders by intentionally driving down the company’s stock price in the months before his 2022 takeover. The jury, however, cleared him of some fraud claims, concluding he did not engage in a broader scheme to defraud investors.
The verdict came at the end of a closely watched civil trial over statements Musk made after agreeing to buy Twitter in April 2022. In the weeks that followed, Musk publicly questioned whether the platform was dominated by fake or spam accounts, commonly called bots. He tweeted that the deal was “temporarily on hold” pending proof that bots made up less than 5% of users, and later suggested the figure could be “much” higher than 20%, saying the acquisition could not proceed unless Twitter’s CEO verified the under‑5% threshold.
When Musk attempted to back out of the purchase, Twitter sued in Delaware to enforce the agreement. He ultimately reversed course just before that case was due to go to trial, paid the original purchase price, closed the deal in October 2022 and later rebranded the company as X.
Shareholders who said they sold Twitter stock because of Musk’s statements brought a class‑action suit. A nine‑person jury was asked to determine whether two tweets and comments Musk made on a May 2022 podcast amounted to intentional fraud that prompted investors to sell.
The nearly three‑week trial, which began March 2, featured testimony from former Twitter executives, including then‑CEO Parag Agrawal and CFO Ned Segal, as well as Musk himself. Musk testified that Twitter’s leadership had misled him about bot counts and withheld details about how those figures were calculated.
On the verdict form, jurors found Musk violated a securities rule that prohibits false or misleading statements intended to depress a stock’s price. They did not, however, find sufficient evidence that he had engaged in a scheme to defraud shareholders.
The suit covers investors who say they sold shares at prices artificially depressed between May 13 and October 4, 2022. The jury awarded damages in the range of roughly $3 to $8 per share per day; plaintiffs’ lawyers estimate total damages could be about $2.5 billion.
Plaintiffs’ attorney Joseph Cotchett called the ruling “an important victory” for both Twitter investors and public markets, saying it underscores that “no man is above the law.” Lawyers for Musk at Quinn Emanuel Urquhart & Sullivan described the verdict as “a bump in the road” and said they plan to seek vindication on appeal.
Edited by: Karl Sexton