Federal judge allows fraud claim over Musk election giveaway to proceed

US District Judge Robert Pitman in Austin denied summary judgment to Elon Musk and America PAC on August 18, allowing a fraud claim brought by Arizona resident Jacqueline McAferty to move forward.

McAferty alleged that Musk's $1 million daily giveaway, run through America PAC before the 2026 presidential election, misled voters into providing personal data by representing that winners would be chosen randomly. Evidence entered in a related Philadelphia District Attorney action showed recipients were selected in advance based on their suitability to serve as America PAC spokespeople, and that the vetting process screened for political alignment.

Musk's attorney Chris Gober argued the payments were compensation for contracted services, not lottery prizes. Judge Pitman rejected the argument that "randomly" was too vague to carry legal meaning, finding a jury could reasonably conclude the selection process was not random.

The breach of contract claim was dismissed with prejudice. The fraud claim proceeds. Judge Pitman adopted the recommendation of US Magistrate Judge Susan Hightower, who found genuine factual disputes over whether Musk's public statements about the selection process were misleading.

About the analyst

Victoria Blackwell

Legal & Regulatory Analyst

Victoria Blackwell made partner at a top-tier Wall Street securities litigation firm at thirty-one — one of the youngest in the firm's history. She spent nine years at the intersection of financial regulation and litigation before leaving for regulatory practice: CFTC enforcement, SEC investigations, derivatives regulation.