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I'm curious, does "reasonable" actually matter in a case like this? Say he tweeted "I just killed someone LOL" and the stock price drops. Could that also be con

• rayiner 8y ago
  The SEC needs to prove he made a “materially” false and misleading statement. The Supreme Court has defined a “material” fact for purposes of the securities laws to mean that there is: > a substantial likelihood that the...fact would have been viewed by the reasonable investor as having significantly altered the “total mix” of information made available. If a statement is an obvious joke, no reasonable investor could have viewed it as altering the mix of relevant information.
  • likpok 8y ago
    Could the SEC use as evidence the fact that the price went up post-tweet, and down after Tesla recanted? That is arguably objective evidence of reasonable investors taking his tweet as a material fact to their trading strategies (i.e. by buying stock).
    • rayiner 8y ago
      Yes. Its not dispositive, because “reasonable” is a legal abstraction (so it admits the possibility that there are unreasonable investors who don’t get the joke), but it’s evidence.