Tesla’s BOD not obligated to review Musk’s tweets about taking ‎the company private – Sources ‎

Two independent Tesla directors testified in a trial on Wednesday that the board was under no obligation to review CEO Elon Musk’s 2018 tweets announcing an offer to take the electric carmaker private that investors say was fraud.

According to Reuters, Musk’s tweets on August 7, 2018 caused the Tesla stock to rise. But after the stock plunged, shareholders sued, saying they had lost money. But board members James Murdoch and Ira Ironprice said the tweets did not have to be vetted by the company before Musk posted them because he did so in a personal capacity.

Musk tweeted that he had secured “funding secured” to take Tesla private at $420 a share, up 23 percent from the previous day’s close. The share price rose after the tweet and then fell when it became clear that the takeover was not going to happen. Tesla shareholders say they have lost billions of dollars because of their investments in stocks and other securities of the company.

The trial is considering whether the world’s second-richest person can be held responsible for his sometimes reckless use of Twitter when he ran afoul of the US Securities and Exchange Commission’s rules on corporate disclosures.

The two members of the board of directors were mentioned in the lawsuit as defendants. Their lawyers, who also represent Musk and Tesla, asked the judge overseeing the case to drop charges against them and other board members including Kimbal Musk, Elon Musk’s brother, saying the investors had failed to prove their responsibility.

Musk testified last week, saying that “funding was never an issue.” However, he admitted that he did not have binding agreements with investors for specific amounts, leaving the jury to decide whether he misled the shareholders.

Both sides will present their closing arguments on Friday. A nine-member jury is expected to begin deliberations on the same day

The jury will decide whether the Tesla CEO artificially inflated the company’s share price by touting acquisition prospects.

The acquisition deal never came close to being successful because investors, especially individual shareholders, expressed their desire to keep the company public, according to Musk’s testimony.