Federal Judge Rules Elon Musk to Face Investor Lawsuit Over Twitter Buyout Statements

Elon Musk is set to face a lawsuit brought by Twitter investors, as ruled by a California federal judge. The lawsuit accuses Musk of deliberately creating uncertainty about his proposed Twitter buyout, aiming to manipulate the social media company’s stock price. US District Judge Charles Breyer found that three statements made by Musk last year, concerning the deal’s status and the number of fake accounts on Twitter, were materially misleading compared to the actual state of affairs.

The judge’s decision to keep these claims alive marks a significant moment in the ongoing legal scrutiny surrounding Musk’s conduct during the buyout process. However, not all claims against Musk were sustained. The judge dismissed some allegations, citing a lack of evidence proving those statements were false or misleading.

The lawsuit, filed in October 2022, centers on the argument that Musk’s public comments negatively impacted Twitter’s stock, causing harm to investors. This legal battle follows Musk’s contentious and ultimately unsuccessful attempt to back out of the $44 billion deal to purchase Twitter. Musk, who has renamed the company X Corp since acquiring it, faces continued legal challenges over his actions during the acquisition.

Musk’s legal representation from Quinn Emanuel Urquhart & Sullivan LLP has not yet responded to this latest development. The case, titled Pampena v. Musk (22-cv-05937), is being heard in the U.S. District Court for the Northern District of California, located in San Francisco.