Tesla shareholder suit claims Elon Musk and other board members lied about car safety
By Out of the battery fire, into the shareholder lawsuit.
Tesla shareholder Ross Weintraub has filed a derivative suit against the company and its board members — including CEO Elon Musk — alleging that a series of dishonest statements made about safety and profitability caused Tesla’s stock price to drop on multiple occasions.
A derivative suit is a legal tool used by shareholders who want to force a company to take corrective action against its own executives or, in this case, to take action directly if board members are unlikely to act. It should be noted that, to many, shareholder lawsuits are like patent trolls: An unfortunate cost of doing big business and not something that inherently bodes badly. Also, in Tesla’s case, their stock isn’t that far off its 52 week high (Chart via Google):
In the complaint, filed in Northern California District Court, and embedded below, Weintraub alleges a long history of dishonesty by the company and by Musk himself, including allegations that Tesla board members:
…allowed the Company to embark on a campaign of false and misleading statements designed to convince the market that the Model S was literally the safest car in existence.”
…allowed the Company to misrepresent the low height and configuration of the Model S battery pack as enhancing the vehicle’s safety, without disclosing its very significant vulnerabilities for high-intensity fires.”
…egregiously allowed the Company to misrepresent the Model S’s history of fire incidents which included at least three very significant fires requiring first responder intervention.
And that Elon Musk himself…
Keep reading Tesla shareholder suit claims Elon Musk and other board members lied about car safety | PandoDaily.
Updated: A Tesla spokesperson told Pando “We believe this lawsuit is without merit and intend to defend against it vigorously.”
