Ann Lipton
Judge Charles Breyer partially sustained Section 10(b) securities fraud claims against Elon Musk, alleging that his accusations about Twitter's spam counts when he was trying to escape the deal were either intentionally or recklessly misleading:
Pampena v. Musk 3:22-cv-05937
Dec 12, 2023 at 1:21amWeb
Show threadAnn LiptonDec 12, 2023
Immediate thoughts: First, simply as a doctrinal matter, it's interesting because it's one of the rare securities cases where the accusation is that prices were artificially depressed - so you can see Breyer try to work out how loss causation works in this context.
Show threadAnn LiptonDec 12, 2023
Second, it's wild that Breyer thinks misrepresenting Twitter's obligations under the merger agreement was material - since we could all see the merger agreement, we read it, and we all publicly said that Musk was misrepresenting it. Musk's attorneys whiffed here -
Show threadAnn LiptonDec 12, 2023

- barely any time spent on materiality and no mention of truth on the market.

Third, there's another pending case alleging Twitter did misstate spam counts, using Musk's own allegations as proof of it, and IIRC, the court said falsity was pled, dismissed on other grounds, and-

Show threadAnn LiptonDec 12, 2023
- gave pltfs leave to replead, so it's funny there are two cases with somewhat contradictory securities fraud claims ongoing, all based on Musk's accusations.
Show threadAnn LiptonDec 12, 2023
I'll just add: when the tweets were issued, the merger agreement was not public yet; theoretically it could have fooled the market about its contents. But the agreement was made public almost immediately afterwards, yet pltfs claim the "truth" was not revealed until -
Show threadAnn LiptonDec 12, 2023
- Musk caved in Delaware, when the stock price shot up. And the court bought it:
Show threadAnn LiptonDec 12, 2023
That's important for plaintiffs; it's where their damages are (i.e., they claim they sold too soon due to Musk's lies). I can't find any argument in Musk's papers that the nature of the agreement was revealed prior to that time, which would establish that -
Show threadAnn LiptonDec 12, 2023

- Musk's capitulation did not "reveal" new information.

Which is quite an oversight by his counsel.