U.S. Judge Rejects Elon Musk’s Bid to Set Aside Twitter Fraud Verdict

By the Editorial Team · Tuesday, July 7, 2026

A federal judge denied Elon Musk’s request to overturn a jury verdict that found he misled Twitter investors by falsely claiming the platform had a high number of spam accounts to depress its stock price during his $44 billion acquisition. This ruling upholds the potential for Musk to owe significant damages and highlights the legal scrutiny over his public statements related to the Twitter deal.

A federal judge on Monday rejected Elon Musk’s request to overturn a jury verdict that found he defrauded Twitter investors by attempting to lower the company’s stock price after agreeing to acquire the social media platform for $44 billion. U.S. District Judge Charles Breyer, presiding in San Francisco, also denied Musk’s motion to decertify the class of investors involved in the lawsuit and approved their motion for prejudgment interest.

The case centers on statements Musk made in May 2022, shortly after agreeing to the takeover, suggesting that Twitter was flooded with fake and spam accounts, commonly referred to as bots. Investors alleged that Musk’s tweets were false and aimed at pressuring Twitter to renegotiate the purchase price or allow him to back out of the deal. They claim these statements caused the company’s shares to decline, resulting in losses when shares were sold at the depressed price.

Judge Breyer ruled that there was “substantial evidence of falsity” in Musk’s May 13 tweet, which indicated that the acquisition was “temporarily on hold” pending verification that bots made up less than 5 percent of Twitter’s user base. The judge wrote that a jury could reasonably conclude Musk used the bot issue as a pretext to exit the agreement. However, the court found Musk was not liable for a later May 17 tweet, which stated the bot percentage could exceed 20 percent and that the deal could not proceed without proof from Twitter’s CEO that it was under 5 percent, citing a lack of market reaction to that statement.

Musk’s legal team did not immediately comment following the ruling. Mark Molumphy, a lawyer representing the investors, called the decision a “very good day” for public market investors, emphasizing that the jury rejected Musk’s efforts to manipulate the system. Attorneys for Musk have previously expressed a preference to contest claims in court rather than settling, and he faces another lawsuit in Manhattan alleging he defrauded Twitter investors by delaying disclosure of his initial investment stake, allowing him to purchase shares advantageously.

Following the verdict in March, investors’ counsel estimated Musk could owe approximately $2.6 billion in damages. Musk completed the acquisition of Twitter in October 2022 and subsequently rebranded the platform as X, integrating it into his SpaceX enterprise.

Judge Breyer also addressed Musk’s claim that jurors had mocked him by emphasizing the number “420” on the verdict form—a figure Musk has frequently used in social media posts and business dealings, including the original Twitter purchase price of $54.20 per share. Musk’s 2018 tweet stating he had secured funding to take Tesla private at $420 per share had previously resulted in a Securities and Exchange Commission fraud lawsuit, which he settled. The judge found no evidence of juror bias linked to the number, noting that the number 420 is widely associated with marijuana culture, particularly in San Francisco, and that the jury’s verdict included rulings favorable to Musk in some respects.

The case underscores ongoing legal challenges faced by Musk related to his acquisition activities and public statements concerning Twitter.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.