Elon Musk Isn’t Keen on Investors Dragging Girlfriend Into Tweet Lawsuit

(Bloomberg) -- Elon Musk's lawyer has a theory for why investors suing the Tesla Inc. chief executive officer are so eager to draw his former girlfriend into a case related to his infamous tweet about taking the electric-car maker private.

“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 filing Thursday in federal court in San Francisco.

The Tesla shareholders say the former girlfriend, 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 a tweet: “Am considering taking Tesla private at $420. Funding secured.”

The investors claim Musk and Tesla manipulated the company's share price. They allege Musk lied about funding to push the shares higher and ambush short sellers betting against the company.

More: Can Elon Musk Tweet That? The SEC Is Digging In: QuickTake

The investors cite news media accounts placing Musk in the company of Boucher, and rapper Azealia Banks, around the time of the tweet. They contend it's not unreasonable to subpoena Boucher and Banks to ensure the preservation of anything in writing that might be relevant to the lawsuit -- Twitter and Instagram messages in particular. They also want to subpoena the New York Times, Gizmodo and Business Insider because they interviewed Musk and Banks and “have information bearing on the veracity of Musk's tweet.”

Typically, pretrial information sharing in shareholder securities fraud cases doesn't begin until after a complaint has been legally tested in court, which hasn't happened yet in the Musk tweet litigation.

Kristy urged the judge to deny the investors' request, saying it's no more than “rank speculation” that Boucher has anything useful to offer about Musk's behavior or his conversations around the time of the tweet.

“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.

Attorneys for the shareholders didn't immediately respond to an email seeking comment.

On Instagram, Banks posted remarks from Kristy's filing challenging her credibility and said “this is going to get extremely ugly.”

“I may be a lot of things but a liar is not one of them,” Banks said in the post. “Elon will learn very soon who is more powerful of us two.”

--With assistance from Edvard Pettersson.

To contact the reporter on this story: Peter Blumberg in San Francisco at pblumberg1@bloomberg.net

To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net, Peter Jeffrey, Joe Schneider

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