A filing submitted late last week by the shareholder party to the securities litigation ongoing against Tesla Inc., CEO Elon Musk, and other company leaders said that the court must issue a temporary restraining order enjoining Musk from speaking publicly about the case until the end of trial in view of the irreparable harm the plaintiff will otherwise face.
The motion points to numerous instances where Musk reportedly disregarded court and other orders, most recently on the TED stage when he exculpated his tweet around which the lawsuit revolves and made disparaging remarks about the Securities and Exchange Commission (SEC).
The high-profile case concerns statements Musk made on Twitter in August 2018 contemplating a move to take the electric vehicle company private at a certain price per share with funding secured. Investors argued that Musk made the statements “recklessly and with full awareness of the facts that he misrepresented in his tweets.”
Recently, the court agreed, granting the plaintiff’s partial motion summary judgment as to falsity and scienter. The SEC reached the same conclusion several years back, finding that the tweets were premised on a string of falsities.
Now, the plaintiff says the court must muzzle the allegedly wayward CEO because of his “…public campaign to present a contradictory and false narrative regarding his August 7, 2018 tweets.”
The plaintiff cites a string of adverse incidents leading up to the TED Talk last week, when, during the interview in Vancouver, Canada, Musk reportedly said that “funding was actually secured. I want to be clear about that. In fact, this may be a good opportunity to clarify that. Funding was indeed secured.” According to the plaintiff, Musk also referred to the SEC as “bastards” and claimed that he only settled with the agency because it had a “‘gun to [his] child’s head” and was ‘forced to admit that [he] lied . . . to save Tesla’s life and that’s the only reason.’”
The motion argues that “[t]he gratuitous and apparently premeditated nature of Musk’s comments and his flagrant disregard of the opinions of the SEC, this Court, and his own written consent, strongly suggest that Musk is likely to continue making similar statements up to trial.”
The publicity he is attracting could “poison the jury pool, and influence the outcome on the eve of trial,” the plaintiff warns.
Judge Edward M. Chen entered an order over the weekend directing the defendants to reply by this Wednesday with no reply brief or hearing scheduled.
Levi & Korsinsky LLP is class counsel and Tesla and Musk are represented by Quinn Emanuel Urquhart & Sullivan LLP.
