Grimes & Azealia Banks subpoenaed in Elon Musk fraud lawsuit
Grimes and billionaire Tesla co-founder Elon Musk‘s whirlwind romance is reportedly over, but its effects linger on. Elon was sued by the Security and Trade Commission for fraud, based on “a series of false and misleading tweets about a potential transaction to take Tesla private.”
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The “false and misleading tweets” include the one above. From the SEC’s complaint:
According to Musk, he calculated the $420 price per share based on a 20% premium over that day’s closing share price because he thought 20% was a “standard premium” in going-private transactions. This calculation resulted in a price of $419, and Musk stated that 7 Case 1:18-cv-08865 Document 1 Filed 09/27/18 Page 8 of 23 he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend “would find it funny, which admittedly is not a great reason to pick a price.”
Elon settled with the SEC in September; he had to step down as Tesla chairman, and pay $40 million in penalties. But his woes aren’t over; he’s being sued again over the same tweets, this time by group of Tesla investors, and they want to subpoena Grimes, along with Azealia Banks. Azealia claimed to have spent a weekend at Elon’s house waiting for Grimes to work on a song with her, ranting about Elon and Grimes on social media all the while – the same weekend he wrote the 420 tweet.
Elon tried to keep Grimes and Azealia out of the lawsuit; in a court filing, his lawyer said, “it is readily apparent that this is more of an effort to sensationalize these proceedings than a legitimate attempt to preserve evidence.”
The court disagrees. The US District Court of Northern California granted a motion by the investors to serve Grimes and Azealia with subpoenas, as well as Business Insider, The New York Times, and Gizmodo, all of whom reported on their weekend together, Business Insider reports.
More from Business Insider:
Adam M. Apton of Levi & Korsinsky, the firm representing the investors, told Business Insider he planned to serve all five parties subpoenas to preserve evidence.
The subpoenas will exclusively call for the parties to refrain from destroying certain documents, messages, and other potential evidence, as opposed to calling for them to provide the evidence to the court.
“Ms. Boucher and Ms. Banks were in close contact with Mr. Musk before and after the tweet and are believed to be in possession of relevant evidence concerning Mr. Musk’s motives,” Apton told Business Insider earlier in January. “Business Insider also appears to have relevant evidence in light of its relationship with Ms. Banks.”
The motion to serve subpoenas seeks to require the parties to preserve information, such as Twitter and Instagram messages, that could be relevant to the case. The filing argues messages posted on social media and shared via text message are “highly susceptible to deletion.”