Elon Musk is about to appear in court for alleged stock market manipulation: What is going on?

The announcement in 2018 about the privatization of Tesla brought Elon Musk here to appear in court.

Elon Musk is due to appear in court on charges of stock market manipulation, after a federal judge rejected a request to move the case out of California. The attorneys argued that a potential jury panel in the trial, scheduled to take place in San Francisco, would likely unfairly consider Elon Musk’s process of managing Twitter.

The case began in August 2018 when Musk posted on Twitter that he was capable of privatizing Tesla. This announcement caused the company’s share price to plummet. Musk was also quickly sued by shareholders for billions of dollars in damages.

According to a court spokesman, Judge Edward Chen on January 13 refused to transfer the proceedings to Texas, the southern US state where Elon Musk is based.

The court, before the hearing, sent questions to about 190 potential jurors to see if they were eligible to participate in the trial.

Judge Chen said he considered the answers, of which, about 49 expressed opposing views about Musk and Tesla, 27 seemed to support the defendant and 76 expressed negative views. It is known that to proceed with the case, the court needs 9 jurors and 6 alternate members.

Earlier in 2018, Musk stunned Wall Street when he posted a status line that wanted to privatize electric car company Tesla. The move forced the richest man on the planet to testify before the US Securities and Exchange Commission (SEC) – the agency responsible for protecting investors. Judge Chen last year also ruled that the tweets were false and seriously misleading.

In November 2022, Elon Musk also had to appear before the Chancery Court of Delaware (USA) to explain the “huge” bonus package for the position of Tesla CEO. The trial focused on clarifying whether the electric car company’s board acted appropriately before approving a bonus package worth about $52 billion for Musk, and whether or not Musk influenced the decision.

At the end of October, Elon Musk acquired the social network Twitter, then laid off about 50% of the staff. The move is expected to make Musk difficult in the upcoming trial. Musk’s attorney also cited numerous negative reactions from politicians and the local media as evidence.

Previously, Elon Musk was sued for $ 258 billion by a Dogecoin digital currency investor for allegedly building a Pyramid model (or fraudulent multi-level Ponzi model) to manipulate the value of Dogecoin. In a complaint filed in federal court in Manhattan, the plaintiff’s representative, Keith Johnson, accused Musk, electric car maker Tesla and space exploration technology company SpaceX of using price manipulation. Dogecoin, then suddenly sold out, causing this digital currency to drop dramatically.

“Elon Musk in 2019 knew that Dogecoin had no value but still promoted the coin and made a profit,” the lawsuit states. “Musk used his pedestal as the richest man in the world to build and manipulate the Dogecoin pyramid scheme.”

The complaint states that the Dogecoin sell-off began around the time Musk hosted the NBC show “Saturday Night Live and played a financial expert”. The richest man on the planet at that time called Dogecoin “hustle”, implying that it was very actively traded.

It is known that the relationship between Musk and the SEC has never been really good. Explaining his opposition to the regulator, this man explained: “The SEC’s mission is good, but the question is whether the SEC will carry out that mission properly or not? In some cases, I think not. The SEC failed to investigate the things they should be concerned about, while focusing too much attention on irrelevant things.”

Musk took the FTX cryptocurrency exchange as an example. “Why hasn’t FTX been noticed? Investors lose a lot of money. However, the SEC continued to hunt me down, while the shareholders were also greatly rewarded. This makes no sense,” Musk said.

Earlier in a filing in Manhattan federal court, the SEC said billionaire Elon Musk did not comply with the agreements in 2018, even voluntarily posting tweets without consulting an attorney. The agency also urged Judge Alison Nathan to ignore Musk’s attempt to rescind the subpoena related to last November’s probe into the sale of 10% of Tesla stock.

“Elon Musk complains about the number of SEC investigations and calls it harassment. However, considering the violations that Musk and Tesla have committed, the requests made by the SEC are completely legitimate,” the SEC representative said.

By: WSJ, Bloomberg