Tesla Shareholders Are Dragging Musk's Ex-Girlfriend Into Securities Fraud Lawsuit


Elon Musk horrified Tesla shareholders over the summer when he revealed that his infamous "Funding secured" tweet heralding his "plans" to take Tesla private at $420 a share was, in fact, an "inside joke" between himself and his then-girlfriend, Canadian electronica musician Grimes (real name Claire Boucher). While it initially went right over the heads of the American financial press, the $420 number incorporated a popular marijuana reference (and also, according to Musk, represented a 20% premium to Tesla's share price at the time, plus $1).


Musk and Grimes parted ways not long after, but much to her chagrin, Tesla shareholders who were burned by the violent swings in Tesla's share price triggered by the tweet and the ensuing investigation are trying to drag her into a lawsuit over the tweet, arguing that she might be able to shed some light on Musk's thinking at the time he sent the tweet.

While Grimes is apparently resisting demands that she be deposed in the case, Musk's lawyers are accusing the plaintiffs of trying to "sensationalize" the proceedings.

"It is readily apparent that this is more of an effort to sensationalize these proceedings than a legitimate attempt to preserve evidence," attorney Dean Kristy said in a court filing Thursday.

Kristy was responding to attorneys representing Tesla shareholders who say the Canadian singer Claire Elise Boucher, also known as Grimes, may have first-hand knowledge about what Musk was thinking Aug. 7 when he shocked the world with his tweet: "Am considering taking Tesla private at $420. Funding secured."

According to media reports, Musk, Grimes and rapper Azalea Banks (who was exploring a collaboration with Grimes at the time) were hanging out at Musk's mansion around the time that he sent the tweet. The plaintiffs argue it would make sense to subpoena Grimes and Banks to preserve their accounts in writing and also gain access to Twitter or Instagram messages that might be relevant.

The plaintiffs also want to subpoena the New York Times, Gizmodo and Business Insider for any relevant information, since these outlets also interviewed Musk, Grimes or Banks in the aftermath of the scandalous tweet.

In securities fraud lawsuits, pretrial information sharing typically doesn't begin until after the claim has been legally tested in court. And it's still possible that the case might be thrown out. But in the mean time, Musk's lawyer is struggling to dismiss these claims as "rank speculation," arguing that every target in such a lawsuit has a spouse or significant other - but they are rarely dragged into lawsuits.

"Indeed, every defendant in every securities class action has a spouse, significant other and friends, but that does not justify discovery of them," he wrote.

Since the incident, Grimes has largely kept quiet about her time with Musk. And given this newfound scrutiny, we doubt we'll be hearing any more from her in the immediate future.