Legal Troubles Mount for Elon Musk: A Comprehensive Overview

The U.S. securities regulator has filed a lawsuit against Elon Musk regarding his acquisition of Twitter, marking the most recent legal dispute faced by the billionaire entrepreneur, who is involved in various ventures including Tesla, SpaceX, and Neuralink.

Below is a list of Musk’s legal tangles.

TWITTER LAWSUITS

The U.S. Securities and Exchange Commission has sued Musk to compel the world’s richest man to testify as part of an investigation into his $44 billion takeover of social media giant Twitter, an Oct. 5 court filing showed.

In May 2022, Twitter investors sued Musk, alleging that he manipulated the company’s stock price by failing to disclose in March 2022 that he was raising shares in the platform, now known as X.

A legal marketing firm sued X in federal court in Florida on Oct. 2, claiming the social media company’s new name infringes on its trademark that includes the letter X.

$56 MILLION TESLA CLAIM

The verdict is also expected shortly after a non-jury trial challenges Musk’s $56 billion salary at Tesla.

In closing arguments in February, the judge pressed lawyers for Tesla executives and an investor to challenge Musk’s pay over whether the company’s explosive growth exceeded misleading disclosures made about the 2018 pay plan.

LABOR DISPUTE

Musk’s major companies Tesla, SpaceX and the social media platform X have been embroiled in several employment discrimination lawsuits.

In October, SpaceX was hit with a proposed class action lawsuit brought by a former female employee who claims the company promotes women and minorities less than white men. The U.S. Department of Justice also sued the space startup in August for allegedly discriminating against asylum seekers and refugees in hiring.

X has been the subject of multiple lawsuits alleging gender, age and disability discrimination that laid off half its workforce last year, as well as two separate cases alleging the company owes the laid-off workers at least $500 million in severance pay.

Tesla and Musk are defending numerous allegations of workplace harassment and discrimination, including lawsuits from the California Department of Civil Rights and the federal Office for Civil Rights.

In April, a federal jury in San Francisco ordered Tesla to pay $3.2 million to a black elevator operator who won a racial harassment lawsuit.

Tesla has said it does not tolerate discrimination and has taken steps to address employee complaints.

LAWSUITS RESULTING FROM MUSK’S TWEETS

Musk’s Tweets on the social media platform he owns have often sparked controversy and caused legal problems.

In March, a US appeals court upheld a decision by the US National Labor Relations Board, saying Musk violated federal labor law by tweeting that Tesla workers would lose stock options if they joined a union. The court will reconsider the decision.

In February, a US jury found Musk and Tesla not liable for misleading investors after the billionaire tweeted in 2018 that he had “secured funding” to take the electric car company private.

The same tweet led to security fraud charges by the US SEC and a 2018 settlement in which Musk resigned as Tesla chairman, paid fines and agreed to get a lawyer’s approval for some of his tweets before they were published.

Musk now plans to ask the U.S. Supreme Court to consider whether the SEC overstepped its authority to enforce the consent decree as part of a 2018 settlement that he has called a “mouthpiece” on free speech.

The settlement with the SEC had led to the creation of a “fair fund” from which a $41.53 million payout will be made to investors who lost money because of Musk’s tweet, a federal judge said in September.

RESEARCH ON TESLA DRIVER ASSISTANCE FEATURES

Tesla is under criminal investigation in the United States over claims that the company’s electric vehicles can drive themselves, Reuters previously reported.

According to documents filed in California state court, Tesla is facing a lawsuit alleging its Autopilot system caused the fatal crash of a Tesla Model 3 that killed one person and injured two other passengers.

However, Tesla’s lawyer in the first US trial over allegations that its Autopilot feature led to the death said the crash was the result of “classic human error”.

The company won a bell-ringing trial in April in Los Angeles over a crash involving Tesla’s Autopilot feature, saying it tells drivers its technology requires human supervision despite the Autopilot name.

BENEFITS OF MUSK

Federal prosecutors in New York have also opened an investigation related to claims related to Musk’s corporate benefits and vehicle mileage, a source familiar with the investigation said. The Wall Street Journal was the first to report on the investigation.

TRUMP SUSPENSION

On October 4, former US President Donald Trump’s lawyer asked the US Court of Appeals to revive his lawsuit, alleging that X violated his and other users’ free speech rights by suspending their accounts. The case was dismissed last year.

INTERNAL TRADE Accusations

In June, Musk was accused of insider trading in a proposed class-action lawsuit in which investors allege he manipulated the cryptocurrency Dogecoin, costing them billions of dollars.

In a filing in federal court in Manhattan, investors said Musk used Twitter posts, online influencers and publicity stunts such as his appearance on NBC’s “Saturday Night Live” in 2021 to profitably trade at their expense in several Dogecoin wallets controlled by him or Tesla through.