- Jul 30, 2021
Yet again, Elon Musk and his company have been sued by Tesla investors over misstatements through tweets.
The new lawsuit, which was filed in Delaware Chancery Court, concerns contravention of duties that Musk and Tesla directors owe to investors.
The case is Laborers’ District Council and Contractors’ Pension Fund of Ohio v. Elon Musk, 2019-187, Delaware Court of Chancery.
In a 2018 tweet, Musk had talked about having secured a funding for a plan to make Tesla private, and then in February 2019 he had tweeted about Tesla possibly producing half a million vehicles this year alone, both of which proved to be ‘misstatements’ when Tesla remained public and also fell short of producing the estimated count.
According to a settlement given by the Securities and Exchange Commission (SEC) to Tesla, among other points, Musk had to get his market-related potential tweets evaluated by Tesla lawyers before posting them on the social media platform for the whole world to see and react to, especially those that could affect investor decisions.
Musk’s repeated ‘misstatements’ are proving to be rather harmful to the company and its shareholders, as Tesla has been fined $40 million and Musk faces the possibility of losing the CEO position.
Mr. Musk has continually disregarded all efforts to rein in his material misstatements on social media. – Michael Barry, an attorney for the Laborers’ District Council
The lawyers for the Laborers’ District Council and Contractors’ Pension Fund of Ohio, one of Tesla’s investors, have expressed that Musk’s “unchecked use of Twitter to make inaccurate statements about the company” should be checked.