Musk argued his tweets were not misleading
A huge chunk of the firefighters' complaint hinges on a claim that Musk's tweets during the time of his trading allegedly misled Twitter investors by cloaking Musk's active interest in buying Twitter.
Musk defended his tweets against claims that he was intentionally trying to mislead the market by tweeting that he was interested in creating his own social media platform or joking that he might buy Twitter. According to Musk, because investors had no idea about his growing stake in Twitter, these tweets could not be considered misleading.
"If anything," the “teasing” tweets "undermine" firefighters' claims, Musk argued, "because they potentially brought unwanted attention" to Musk secretly amassing a large stake in Twitter. Arguably this more likely tipped off investors to his interest in purchasing Twitter than obscuring it, Musk claimed.
Musk also tried arguing that his tweets were misunderstood. For example, Musk responded to a Twitter user joking that he should buy the platform and replace the bird logo with a Dogecoin logo by tweeting, "Haha that would be sickkk."
The firefighters pension fund had argued that Musk left out "critical information that he already owned nearly 10 percent of the company" when tweeting his response. But in his court filing, Musk argued that "Musk was referring to the user’s joke about making Doge Twitter’s logo" as being "sickkk," not the idea of him buying Twitter.
"Even assuming the tweet made a representation about buying Twitter, Plaintiff does not explain how Musk’s existing ownership of Twitter stock renders a statement that it would be 'sickkk' to buy all of Twitter misleading," Musk's court filing said. It also noted that Musk didn't text the former CEO of Twitter, Parag Agrawal, to express interest in buying Twitter until after this exchange was posted.
"Plaintiff fails to establish how Musk’s tweets were false or misleading," Musk's filing said. "If anything, Musk’s tweet suggested to the market that Musk had more interest in a Twitter takeover than he actually did at the time, the exact opposite of Plaintiff's theory."
It’s not illegal to keep trading secret, Musk argued
The firefighters pension fund showed the courts texts from Musk's banker—Jared Birchall, who is also a defendant in the suit—showing that he was determined to keep the trading "absofuckinglutely quiet" to avoid the prospect that "anyone sniff anything out."
Musk defended keeping this strategy secret as completely normal in the trading world.
"The desire to maintain secrecy 'give[s] rise only to the inference that' Musk 'did not want' certain conduct known—which indicates nothing about intent to defraud," Musk's filing said.
Musk cautioned that it could set a confusing precedent if the court agreed with the firefighters' pension fund that showing that he kept his trading secret was all that was needed to show intent to deceive Twitter investors.
"If 'secrecy' were sufficient" to show intent of wrongdoing, Musk's filing said, "the trading practices of virtually every investment firm in America would be sufficient" to show wrongdoing.
"Simply put, Plaintiff does not—and cannot—allege that it is unusual to not disclose one’s trading strategy to the market," Musk argued.
Further, if Musk so desperately needed to keep his trading strategy secret to support his alleged scheme, Musk would never have told Twitter leadership that his stake had risen above 5 percent, Musk argued.
"The fact that he shared such information with Twitter leadership undermines" claims of "wrongdoing," Musk argued. "If Musk knew he was violating Rule 13, he would have kept his secret not only from the market but also from Twitter leadership, especially because Twitter had its own reporting obligations."
reader comments
158