Published On: Fri, Aug 10th, 2018

Tesla CEO Musk accused in lawsuit of defrauding shareholders


(Reuters) – Tesla Inc and Chief Executive Elon Musk were sued on Friday by an investor who said they defrauded shareholders in a scheme to manipulate the electric car company’s stock price, starting with Musk’s Aug. 7 tweet that he might take Tesla private.

FILE PHOTO: Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017. REUTERS/Aaron P. Bernstein/File Photo

In a proposed class-action complaint filed with the federal court in San Francisco, Kalman Isaacs said the scheme was conducted in part to “completely decimate” short-sellers, eventually leading to an inquiry by the U.S. Securities and Exchange Commission.

The class includes investors who bought Tesla shares as they were rising in the wake of Musk’s tweet. The share price later fell.

Reporting by Jonathan Stempel in New York, Editing by Rosalba O’Brien



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Tesla CEO Musk accused in lawsuit of defrauding shareholders