Tesla shareholders are suing Tesla, CEO Elon Musk, CFO Zachary Kirkhorn, and his predecessor Deepak Ahuja. The group of shareholders claims that the company and its executives have continued to overstate the capabilities and safety of its Autopilot and Full Self-Driving capability technologies.
The group filed a class-action lawsuit in San Francisco federal court suggesting they’ve been defrauded by Musk and Tesla. The group goes on to add that it believes Tesla may have hidden the cause of fatal crashes to push its false narrative about the driver-assist systems over the course of the last four years.
Those shareholders suing Tesla and Musk state that the company’s misrepresentation of its safety systems “created a serious risk of accident and injury.” They go on to add that when people learned of the ineffectiveness of Tesla’s technologies, the stock price dropped, which was damaging to shareholders.
The National Highway Traffic Safety Administration is currently investigating Tesla’s driver-assistance systems, and the automaker has had to pause the rollout and software updates until it can fix an issue noted by the organization.
Meanwhile, Automotive News points out that the Securities and Exchange Commission was also investigating Musk related to his claims about the safety technologies. The shareholders’ complaint says:
“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common stock, plaintiff and other class members have suffered significant losses and damages.”
Shareholder Thomas Lamontagne is heading up the recent lawsuit, which requests damages of an unspecified amount be paid to Tesla shareholders for the time period running from February 19, 2019, through February 17, 2023.
Tesla’s stock lost nearly half its value last year since its high point that came in November of 2021. The share price has been on the way back up, likely related to Tesla’s 2022 price cuts resulting in a boost in demand. However, the price is still very low compared to its past performance.