- Related documents
- Musk discussed deal with private equity executive
- Investors want him to appear for deposition
- Lawsuit seeks damages over Musk’s 2018 “funding secured” tweet
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(Reuters) – Tesla Inc investors suing over Chief Executive Elon Musk’s 2018 tweet claiming he had secured funding to take the electric car company private want a federal judge to order the private equity executive Musk spoke with about the potential $72 billion transaction to testify.
In a letter to U.S. Magistrate Judge Kandis Westmore in Oakland on Friday, attorneys for the shareholders said they have a right to depose Egon Pierre-Durban, co-chief executive of Silver Lake Technology Management, about his communications with Musk and others.
Durban replied in the joint filing that a deposition would be overly burdensome because plaintiffs already have the transcript of his four-hour interview with the Securities Exchange Commission in 2018 about his talks with Musk.
Attorneys for the parties did not immediately reply to requests for comment on Monday.
The lawsuit seeks damages from Musk, Tesla and its directors on behalf of investors who bought or sold Tesla stock in the days after Musk’s surprise Twitter announcement on Aug. 7, 2018.
“Am considering taking Tesla private at $420. Funding secured,” Musk said in the tweet.
Musk’s tweet helped push Tesla’s stock price more than 13% above the prior day’s close. But it soon gave those gains back, and by Aug. 17, 2018 had fallen 11% below where it was before the tweet.
Musk tweeted on Aug. 24, 2018 that Tesla would remain public.
A month later, he agreed to pay a $20 million civil fine to settle fraud charges by the U.S. Securities and Exchange Commission. Tesla reached a separate $20 million settlement with the regulator.
Durban spoke with Musk the day before the tweet and continued discussing a potential going private transaction with him in the days afterwards, according to the letter filed Friday.
Now, facing a late September deadline to gather information from fact witnesses, investors pursuing the litigation say Durban should sit for a deposition on topics he did not discuss with the SEC.
The investors want details regarding his 35-page presentation to Musk about the potential transaction on Aug. 10, 2018 and communications with Goldman Sachs and others about the deal.
Durban has said the burden of being deposed outweighs any benefit to the plaintiffs and that he has agreed to testify if the case reaches trial.
Tesla and Musk agreed to have the lawsuit proceed as a class action in May. U.S. District Judge Edward Chen had denied their motion to dismiss the lawsuit last year.
Both sides may seek summary judgment later this year, with a hearing on the motions scheduled for February.
The case is In re Tesla Inc Securities Litigation, U.S. District Court, Northern District of California, No. 18-04865.
For the class: Adam Apton of Levi & Korsinsky
For Durban: Warren Metlitzky of Conrad Metlitzky Kane and Elliot Greenfield of Debevoise & Plimpton.
Tesla, Musk must face shareholder lawsuit over going-private tweet