A jury in California, United States, held on Friday (March 20, 2026) that business tycoon and X (formerly Twitter) owner, Elon Musk, misled investors during the purchase of the social media company in 2022. The California jury found the allegations of Twitter investigators against Musk true, but held Musk not guilty of engaging in a ‘scheme’ to defraud the investors.
Weeks before Musk completed the acquisition of the company in October 2022, a class action suit was filed against him. The investors accused Musk of making false public statements and intentionally driving down the social media company’s stock before the acquisition. Musk is accused of making tweets and statements to suggest that the deal was on hold and might not be completed. This led the investors to panic-sell their stocks.
Musk cast suspicions on Twitter’s claimed level of bots, spam and fake accounts on its platform. He announced that Twitter’s acquisition was on hold until the company’s then CEO could prove its inauthentic account levels were around the 5% reported in the company’s SEC filings. Musk’s statements caused a decline of 10% in Twitter shares in a single session. After days of deliberations, the jury unanimously found that Musk’s tweets on May 13, 2022 and May 17, 2022, were materially false or misleading.
It was the argument of former Twitter shareholders, including retail investors and options traders, that Musk’s remarks were part of a scheme to pressure the company’s board to sell to him for a lower price than his original offer. They claimed that Musk was motivated to do so by the decline in his automaker company Tesla’s stock, which would have required him to sell more Tesla shares than he’d intended to finance the purchase.
The investors told the jury that they had to sell below $54.20 after Musk’s posts and comments. According to the attorneys representing the plaintiffs, total damages in the suit could reach up to $2.6 billion. The plaintiffs welcomed the decision of the jury. “This is a great example of what you cannot do to the average investor — people that have 401ks, kids, pension funds, teachers, firemen, nurses. That’s what this case was all about. This was not about Musk. It was about the whole operation,” Joseph Cotchett, an attorney for the Twitter investors, told CNBC. They said that the claims administration will be set up after 90 days, and a couple of months will be taken by the government to process claims and for investors.
“We view today’s verdict, where the jury found both for and against the plaintiffs and found no fraud scheme, as a bump in the road. And we look forward to vindication on appeal,” said Musk’s attorneys, adding that his statements were based on well-founded concerns about bots, spam and fake accounts on Twitter and did not amount to securities fraud or a scheme to depress the company’s stock price.
After agreeing to buy X (then Twitter) in April 2022, Musk finally acquired the company in October 2022 for $44 billion. He later renamed the company X and merged it with his artificial intelligence company xAI. Subsequently, he merged it with SpaceX, his reusable rocket manufacturer.
