Jury Finds Musk Misled Twitter Investors in 2022 Buyout, SEC Trial Looms

A federal jury in San Francisco ruled Friday that Elon Musk made false and misleading statements that artificially depressed Twitter’s share price in the months leading up to his $44 billion acquisition in October 2022. The verdict, delivered after a three-week civil trial, found Musk liable for violating securities law, though jurors stopped short of saying he engaged in an outright scheme to defraud investors. Attorneys for the plaintiff class told reporters they will seek roughly $2.6 billion in damages, a figure that would eclipse any prior shareholder recovery tied to Musk’s tweets.

While the civil jury spoke, a parallel enforcement action brought by the Securities and Exchange Commission remains very much alive. Judge Andrew Carter in Manhattan recently denied Musk’s motion to dismiss the regulator’s complaint, clearing the way for a second trial or settlement talks. The SEC claims Musk violated disclosure rules by quietly accumulating more than 13 million Twitter shares—9.2 % of the company—before belatedly revealing his stake on April 4, 2022. Both sides told the court this week they are preparing for trial after settlement negotiations stalled.

The shareholder lawsuit zeroed in on a string of posts and public statements between May and October 2022, including claims that Twitter was riddled with fake accounts and that the deal was “on hold.” Internal communications shown at trial revealed that Musk himself drafted several of the challenged tweets minutes after speaking with bankers and lawyers. Plaintiffs argued the messages shaved billions off Twitter’s valuation, allowing Musk to close at a lower price or walk away altogether. Musk countered that he was simply exercising due diligence, but the jury found his words objectively misleading under securities-law standards.

A $2.6 billion judgment would dwarf the $150 million Musk paid in 2018 to settle the SEC’s Tesla “funding secured” tweet case. Legal experts note that any payout would come from Musk personally, but X Corp—Twitter’s successor—could still feel indirect pain. The company is already contending with advertiser flight and heavy debt service on the $13 billion in loans that financed the buyout. A massive award could pressure Musk to sell additional Tesla or SpaceX stakes, or inject fresh equity into X to keep it afloat.

Judge Edward Chen, who oversaw the civil trial, will hold a separate hearing on damages in the coming weeks. Meanwhile, the SEC’s disclosure case is tentatively set for trial in early 2027 unless a settlement emerges. Observers expect Musk’s legal team to appeal both the liability finding and any damage calculation, a process that could stretch into 2028. The overlapping litigation also raises the stakes for Musk’s other ventures: regulators have already signaled heightened scrutiny of his public communications at Tesla and SpaceX.