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The complaint alleges that “Musk’s tweet without further investigation” could lead to serious allegations against the company’s ability to secure finances, and that it “makes a lot of noise in the company that it has to stand up and protect investors”. Says.
In a 105-page derivative lawsuit filed Friday in Delaware Chancery Court, the Electric Vehicle Manufacturers Board accuses it of failing to impose Musk’s behavior online, despite repeatedly violating the 2018 settlement with the Securities and Exchange Commission.
The agreement, which included payments of $ 20 million each from Musk and Tesla, called on the company to strictly adopt new monitoring procedures regarding Musk’s social media posts.
Immediately after Musk faced contempt claims for violating the terms of the deal in 2019, the new compliance rules were tightened, according to a partial complaint.
But while Tesla churned through in-house attorneys, he alleged that he “continued to issue tweets without the necessary prior approval.”
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One of the examples cited by the shareholder lawsuit was a May 2020 Twitter post in which Musk sent out Tesla shares at a higher price. The complaint states that the tweet alone “destroyed nearly 14 14 billion of Tesla’s market capitalization in a single day.”
The lawsuit alleges that “Musk’s misconduct” and “failure to ensure Tesla’s compliance” caused “significant damage” to the company.
It was originally filed on March 8 under the seal.
Reason for action: Breach of fiduciary duty.
Relief: Losses, costs, fees and interest.
Feedback: Tesla did not immediately respond to a request for comment Friday.
Lawyers: Plaintiff is represented by Cooch & Taylor PA and Botini & Botini Inc.
Case G Riti Vs. Musk, Dale. C., No. 2021-0199, Complaint Ansil is 3/12/21.
