Over 3,000 Tesla shareholders are poised to get around $12,397 each after a lawsuit by the Securities and Exchange Commission (SEC) related to Elon Musk’s 2018 “funding secured” tweet.
In 2018, Elon Musk, Tesla’s CEO, made headlines with his tweet asserting he had “funding secured” to make Tesla a private entity at $420 a share. This prompted the SEC to accuse Musk of misleading investors. As per the SEC documentation, 3,350 claimants are eligible for the compensation, retrieving 51.7 percent of their estimated acknowledged loss.
The SEC is now seeking a judge’s nod for the final approval of the compensation scheme. To qualify for the payout, shareholders had to submit a requisite form to Rust Consulting by September 2022. The repercussions of the lawsuit resulted in a civil penalty summing up to $40 million plus interest on both Musk and Tesla. The SEC’s assessment deduced that Musk’s tweet caused investor losses approximating $80 million.
In a 2022 attempt, Musk tried but failed to get a judge to terminate the SEC agreement. Notably, Musk appeared weary of the obligation of having his tweets scrutinized by a Tesla executive, often humorously dubbed his “Twitter sitter.”
