Jury hands Elon Musk 'not guilty' verdict in Tesla shareholders fraud case

SAN FRANCISCO - The three-week trial pitting Tesla shareholders against CEO Elon Musk came to an abrupt end Friday, as the jury handed down a "not guilty" verdict about one hour after entering deliberations in the securities fraud case. 

At the federal courthouse in San Francisco, the jury began deliberations about 12:30 p.m. Friday, and announced they had reached a verdict before 2 p.m.

Musk appeared in court for the closing arguments earlier in the day and did not speak to media as he left Friday afternoon.

Attorneys for Tesla stockholders stopped very briefly outside to talk with media and said they were disappointed with the verdict.

Tesla shareholders had sued Musk, saying they lost billions of dollars in 2018 when Musk made statements on Twitter that he had funding secured to take his Tesla electric vehicle company private at $420 a share.

The lawyer for Tesla investors said that jurors should punish Musk for having a quote, "loose relationship with the truth."

Tulane Law School Professor Ann Lipton says Federal Judge Edward Chen had already ruled that Musk's statements on Twitter were "reckless."

"The judge said had already concluded that he acted recklessly and recklessly is actually enough for liability," said Lipton, "For liability, you need a lot of different things to line up. You need the statements to be false. You need them to have been made either recklessly or intentionally. And you need them to be material in the sense that they were materially false that they move the market."

Musk's attorney conceded that the tweets from 2018 were "technically inaccurate," but he told the jurors, "Just because it's a bad tweet, doesn't make it fraud."

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"His main argument was this stock reacts to sentiment, it reacts to what Elon Musk is thinking what he's dreaming at a particular time," said Professor Lipton, "Presumably their verdict was really based not so much on what he intended to do or not intended to do. But on the idea that Tesla investors really didn't see much of a difference between funding secured and a handshake deal."

After the verdict was read, Musk posted a statement on Twitter: "Thank goodness, the wisdom of the people has prevailed! I am deeply appreciative of the jury's unanimous finding of innocence in the Tesla 420 take-private case."

Some jurors stayed in the courtroom after the verdict announcement to speak with the attorney for Tesla shareholders.

The jurors told him they had doubts that Musk's social media posts on Twitter were the only reason for the Tesla's stock price fluctuations.

Jana Katsuyama is a reporter for KTVU.  Email Jana at jana.katsuyama@fox.com and follow her on Twitter @JanaKTVU or Facebook @NewsJana or ktvu.com.