Elon Musk faces US fraud trial over Tesla tweet

Elon Musk, the chief executive of Tesla, will go on trial Tuesday for allegedly manipulating the stock market with a tweet after a federal judge denied his request to move the case out of California.

The issue dates back to August 2018, when Musk tweeted that he had enough funding to take Tesla private, sending the company’s stock price soaring.

Musk quickly sued shareholders for costing them billions of dollars by tweeting that the financing was “secured” to buy out the company’s shareholders.

According to a court spokesman, Judge Edward Chen on Friday declined to transfer the proceedings to Texas, the southern state where Musk moved Tesla’s headquarters and jury selection is scheduled to begin Tuesday.

Defense lawyers had argued the multi-billionaire would be denied a fair trial in San Francisco, where he bought Twitter in late October and has been widely criticized for his decisions since taking over the social media company.

After taking over Twitter, Musk laid off more than half of its 7,500 employees, most of them in San Francisco, and radically changed the site’s content moderation policies.

“Over the past several months, the local media has saturated this area with biased and negative stories about Mr. Musk that have fostered … highly prejudicial prejudices in the jury pool,” the CEO’s lawyers argued in a filing.

“The local media, in a departure from how they usually cover these stories, have accused Mr. Musk personally for the reductions and even accused him of breaking the law,” the lawyers said.

According to Bloomberg, throughout the hearing, Judge Chen expressed confidence that impartial jurors could be selected.

Musk’s brief post in 2018 already caught the attention of the authorities.

The United States Securities and Exchange Commission has ordered Musk to step down as Tesla’s chairman and pay a $20 million fine.