Shareholders sue the Twitter CEO, Elon Musk, again, alleging they were defrauded with false claims of the vehicles’ capabilities

By Kari Paul and agencies

Elon Musk is facing yet another lawsuit as shareholders of Tesla accuse the chief executive and his company of overstating the effectiveness and safety of their electric vehicles’ autopilot and full self-driving technologies.

Shareholders have alleged in the proposed class action lawsuit that Tesla defrauded them over four years with false and misleading statements that concealed how its technologies – suspected as a possible cause of multiple fatal crashes – “created a serious risk of accident and injury”. The case was filed Monday in a San Francisco federal court.

The case centers on the financial fallout of Tesla’s failed autopilot features, citing when the company’s share price fell after reports that the National Highway Traffic Safety Administration and the Securities and Exchange Commission had begun investigating the technologies.

The share price also fell 5.7% on 16 February 2023 after NHTSA forced a recall of more than 362,000 Tesla vehicles equipped with full self-driving beta software because they could be unsafe around intersections.

“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s common stock, plaintiff and other class members have suffered significant losses and damages,” the complaint said.

Tesla, which does not have a media relations department, did not immediately respond to requests for comment.

The suit, which is led by shareholder Thomas Lamontagne seeks unspecified damages for Tesla shareholders from 19 February 2019 to 17 February 2023. Chief financial officer Zachary Kirkhorn and his predecessor Deepak Ahuja are also defendants.

Musk has been sued in the past over how his decisions impact company shares, including a suit over tweets he sent about taking Tesla private – which shareholders claimed cost them millions of dollars. That case was decided in Musk’s favor earlier this month. In another lawsuit continuing this week, shareholders claim they received “misleading” information that led them to approve an exorbitant pay package for the billionaire.

The legal action Musk faces is not limited to Tesla. The executive, who also helms Twitter, SpaceX, and Neuralink, is facing lawsuits spanning all of his companies, including a recent suit filed by Twitter shareholders who say the executive’s antics when purchasing the social media firm contributed to volatility in the company’s price.

As these suits continue, Musk is expected at Tesla’s 1 March investor day to promote the company’s artificial intelligence capability and plans to expand its vehicle lineup.

Courtesy: Guardian News & Media Ltd. 

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