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Monday, March 4, 2024

Tesla and Elon Musk Sued by Shareholders for Misrepresentation

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Tesla and its CEO Elon Musk have been sued by shareholders who have accused the company and the billionaire of overestimating the effectiveness and safety of their Autopilot and Full Self-Driving technologies for their electric vehicles.

In the presented class action lawsuit, which was filed in federal court in San Francisco, shareholders allege that Tesla misled them for four years with false and deceptive statements concealing that its technologies, believed to be the possible cause of many fatal crashes, “created a serious accident risk” and injuries,” Reuters reported.

Shareholders saw Tesla’s stock price drop several times as the truth was revealed, especially after the U.S. Road Safety Authority launched investigations into the technology and after reports that the Securities and Exchange Commission was investigating Musk’s claims about Autopilot.

A sharp fall in the value of shares

“As a result of the defendants’ improper actions and omissions and the sharp decline in the market value of the company’s common stock, the plaintiff and other members of the group suffered significant losses and damages,” the lawsuit said.

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The letter did not specify the exact sum that shareholders would expect. It is only about compensation for them. Tesla did not immediately respond to Reuters requests for comment.

Main photo source: EPA/ERIK S. LESSER

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