SAN FRANCISCO: A federal judge in San Francisco dismissed for the second time a securities fraud lawsuit brought by Tesla Inc shareholders alleging that the company made misleading comments about the production status of its Model 3.
US District Judge Charles Breyer sided with Tesla, granting the electric vehicle company dismissal of the lawsuit brought in Oct 2017.
Breyer dismissed the original lawsuit in Aug but allowed plaintiffs to file an amended one.
The lawsuit sought class-action status for shareholders who bought Tesla stock between May 3, 2016 through Nov 1, 2017.
It said shareholders bought “artificially inflated” shares because Musk and other executives misled them with bullish statements about the production ramp of the Model 3, failing to disclose that the company was “woefully unprepared” for the vehicle’s production.
Tesla argued in its defence that it had been forthcoming about challenges with Model 3 production, including repeated statements by Musk that Tesla was undergoing “production hell.”
Breyer wrote that the allegations of fraud ignored Tesla’s “repeated warnings about Model 3 production risks.”