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Tesla shareholders who claimed to face financial losses after CEO Elon Musk tweeted about taking the company private might be on the verge of receiving compensation from a $42.3 million fund established as part of Musk\u2019s federal securities fraud settlement.<\/p>\n
The United States Securities and Exchange Commission said 3,350 eligible claimants will share in the payout, recouping almost 52% of their losses, according to a Wednesday night court filing in the Southern District of New York Court.<\/p>\n
The compensation to investors comes several months after Musk was found not liable in a class-action securities fraud trial that explored how the CEO\u2019s now infamous \u201cfunding secured\u201d<\/a> tweet caused volatility in the stock, resulting in losses of money. If Musk had lost the trial, he\u2019d have paid out billions of dollars in damages to investors.<\/p>\n The fund comes from a 2018 settlement<\/a> with the SEC over the tweet. After the SEC filed a complaint alleging Musk lied when he tweeted he had secured funding for a private takeover of the company at $420 per share, Musk agreed to step down as chairman of Tesla and pay a $20 million fine. Tesla agreed to pay a separate $20 million penalty. The total amount grew to $42.3 million with interest payments.<\/p>\n U.S. District Judge Lewis Liman in Manhattan said Thursday he hopes to approve the payouts by September 1 or shortly afterward.<\/p>\n The SEC settlement also included a stipulation that Musk agree to let a Tesla lawyer approve some of his Twitter posts. Musk has sought to scrap that decree, calling it a \u201cmuzzle\u201d on his right to free speech. In May, Judge Liman, who oversees the case, denied the motion to end the decree<\/a>.<\/p>\n Musk is expected to appeal that decision to the U.S. Supreme Court.<\/p>\n<\/p><\/div>\n