"Funding Secured" Trial Against Tesla and Musk Begins in San Francisco

Elon Musk Faces Trial Over His 2018 Plan to Take Tesla Private

More than four years after he said he had secured the funding to take Tesla off the stock market, Elon Musk will try to defend that statement in a trial that begins on Tuesday in a federal court in San Francisco.

The case is brought by investors who claim Mr. Musk, the electric automaker’s chief executive, had not in fact lined up the money to take Tesla private and acted recklessly in discussing the embryonic plan to do so. If the plaintiffs get a jury to rule in their favor, Tesla and Mr. Musk could be forced to pay billions of dollars in damages.

The trial centers on what Mr. Musk said on Twitter, which he acquired in October. “Am considering taking Tesla private at $420. Funding secured,” he wrote in a post on Aug. 7, 2018.

SPAC-Related Securities Suit Dismissals Could Be Significant for Other Cases

In two dismissal motion grants last week in pending SPAC-related securities suits, the respective courts’ rulings could have potential significance for other pending or prospective SPAC-related cases. The January 10, 2023, ruling in the SPAC-related suit involving DraftKings has important implications for the many pending SPAC-related cases based on short seller reports, and the January 11, 2023, ruling in the Lucid case has potential implications for SPAC-related securities suits based on alleged pre-merger misrepresentations. The two rulings and their potential significance are discussed below.

AmerisourceBergen Spat Gives Investors Edge in Corporate Suits

A first-of-its-kind ruling in a case against AmerisourceBergen Corp. could give investors more time to hold corporate leaders accountable for their company operations.

The Delaware Chancery Court applied a new framework for evaluating allegations of wrongdoing over a long period of time: Treat the alleged instances of a wrongful act as part of a sequence, and then each instance gives rise to a separate statute of limitations.

That means shareholders may have more leeway to file claims of a fiduciary breach of duty against the leaders or board members of drug companies, banking institutions, or other corporate entities, legal scholars say. Such claims, alleging that a board failed to engage in adequate oversight or ignored red flags over many years, are commonly referred to as Caremark claims.

SEC Awards More Than $5 Million to WhistleblowerThe Securities and Exchange Commission today announced an award of more than $5 million to a whistleblower whose information led to a successful SEC enforcement action.

The whistleblower provided a tip and additional information that helped SEC staff shape its investigative strategy, identify witnesses, and draft document and information requests. The whistleblower also internally reported concerns prior to submitting information to the SEC.

IPO Bust Sends Big Law Work Plummeting 95% From Record Year

There’s some good news for capital markets lawyers: 2022 is over.

It was a dismal 12 months for US initial public offerings, which raised just more than $18 billion last year, according to data compiled by Bloomberg. That’s down more than 95% from the record $275 billion raised in 2021, propelled by a boom in blank-check companies that have since fallen off the map.