A trial brief was filed by defendants Elon Musk, Tesla, Inc., and more on Tuesday in the Northern District of California. The brief reiterates the defendant’s argument that the Tesla investor suit, which alleges violations of section 10(b), rule 10b-5, and the Exchange Act, is unfounded as they allegedly will be unable to prove their claims.
The court filings recount that, in August 2018, Elon Musk posted a tweet in which he announced his plans to take Tesla private at $420 per share and detailed the proposed funding for the process.
The defendant’s newest brief explains that “those details were not materially false or materially misleading because they did not differ in any material way from the actual state of affairs.”
The defendants argue that the plaintiffs’ suit, which seeks billions of dollars, is based on the plaintiffs “unprecedented theories of market impact and loss causation” that have no relation to the facts of the case.
The plaintiffs, the brief explains, cannot prove that the statements made by Musk were materially misleading. In addition, the plaintiff will allegedly also be unable to establish reliance through the fraud-on-market presumption, meet the suit’s burden of scienter, or “prove that the statement the Court found to be literally false were material.”
Finally, the brief argues that the plaintiff’s argument does not take into account that following Musk’s statement regarding his considering of taking Tesla private, Tesla’s stock price increased, rendering any damages alleged by the plaintiff uncertain at best.
The trial brief submitted on Tuesday by the defendants assert that the plaintiff will be unable to prove the claims made in the initial complaint or ascertain any damages. The class is represented in the litigation by Keller Postman and Ellis George Cipollone O’Brien Annaguey. The defendants are represented by Quinn Emanuel Urquhart & Sullivan, Fenwick & West, Cooley, and Wilmer Cutler Pickering Hale and Dorr.