Tesla Shareholders Sue Over Losses Due to Musk's Tweet

In 2018, Also Sued for Tweets 'Seolhwa' and Settled

[Asia Economy New York=Correspondent Baek Jong-min] Elon Musk, CEO of the American electric vehicle company Tesla, is once again facing legal scrutiny.

[Image source=EPA Yonhap News]

An investor has sued Musk and Tesla's board of directors, claiming that Musk's tweets exposed them to investment loss risks.

According to U.S. media on the 12th (local time), an unnamed Tesla investor filed a lawsuit in Delaware court alleging that Musk's "erratic" tweets, including one on May 1 last year stating that Tesla's stock price was too high, exposed shareholders to billions of dollars in losses.

The investor also pointed out that Tesla's board of directors failed to properly monitor Musk's tweets as required by an agreement with the U.S. Securities and Exchange Commission (SEC).

He stated, "Musk's unchecked tweets seriously affect Tesla's ability to raise funds," and added, "Musk's tweets are also silencing voices within the company that aim to protect investors against Musk."

The plaintiff argued that despite the prior agreement with the SEC, Musk continues to tweet without prior review procedures, and that Musk and Tesla's directors should be held liable for damages.

In August 2018, Musk posted a tweet about taking Tesla private, which caused significant stock price fluctuations and led to sanctions from the SEC.

At the time, as Wall Street was increasingly bearish on Tesla's stock, Musk tweeted in frustration that he was "considering taking Tesla private at $420 per share."

In response, the SEC sued Musk for securities fraud, accusing him of misleading investors. Musk agreed to pay a total of $40 million in fines personally and on behalf of Tesla. As part of the settlement, Musk also agreed to have Tesla's in-house lawyers pre-review some of his tweets.

This content was produced with the assistance of AI translation services.