More than 3,000 Tesla shareholders are set to receive a payout of approximately $12,397 each, following a Securities and Exchange Commission (SEC) lawsuit against Elon Musk for his infamous “funding secured” tweet from 2018.
MarketWatch reports that in 2018, Tesla CEO Elon Musk sent out a tweet that would quickly become infamous. Musk’s tweet claimed that he had “funding secured” to take Tesla private at $420 per share. This led to a lawsuit filed by the SEC, accusing Musk of defrauding investors. According to the SEC filing, a total of 3,350 claimants will benefit from the payout, recouping 51.7 percent of their calculated recognized loss.
The SEC has asked a judge to give the payout plan final approval. In order to receive payment, shareholders must have submitted a claim form to the administrator, Rust Consulting, by September 2022. The lawsuit culminated in civil penalties of $40 million plus interest against Musk and Tesla. The SEC estimated that the tweet led to investor losses amounting to $80 million.
In 2022, Musk unsuccessfully petitioned a judge to end the SEC settlement. In particular, Musk seemed to be tired of being tasked to have his tweets reviewed by a Tesla executive popularly referred to as his “Twitter sitter.”
As Breitbart News reported:
Musk argued that the agreement infringed on his right to free speech and that the SEC had used the agreement as an excuse to “launch endless, boundless” investigations of his public statements. Musk alleged that he only accepted the settlement in the first place as the litigation would have placed too much financial pressure on Tesla at the time.
Judge Lewis J. Liman of the U.S. District Court for the Southern District of New York wrote in a ruling issued Wednesday that “none of the arguments hold water,” and dismissed Musk’s claims. Judge Liman wrote that Musk’s claims that he agreed to the SEC’s conditions due to financial burden were “wholly unpersuasive” and that Musk was “already a multi-billionaire in 2018 and one of the wealthiest individuals in the world.”