"Hot News"

The second richest man in the world faces a new lawsuit


 The second richest man in the world faces a new lawsuit

(Elon Musk) Elon Musk - the second richest man in the world - is facing a new lawsuit from a Tesla shareholder who accused him of violating the 2018 settlement with the US Securities and Exchange Commission over his use of Twitter.

The second richest man in the world faces a new lawsuit

According to a complaint in the Delaware Chancery Court, which also identifies the electric car company's board of directors as defendants, the erratic tweets of the world's second-richest man and the failure of Tesla managers to ensure his compliance with the SEC settlement have exposed shareholders to billions of dollars in losses.

The complaint highlighted several posts by the world's second-richest man on the social media platform Twitter, including his saying in May that Tesla's share price was too high, which led to a drop in Tesla's market value by more than $ 13 billion.  

 Prosecutor, Chase Gharrity, said Musk's actions and managers ’inaction caused significant financial damage, and they should pay Tesla for breaching their fiduciary duties.

The lawsuit was filed even though Tesla's share price has increased nearly five times since Musk's tweet, giving Tesla a much higher valuation of $ 600 billion, and the SEC has not publicly accused Musk of the recent violations.

Charles Elson, a professor at the University of Delaware who specializes in corporate governance, said: The new lawsuit could pressure the SEC to take some kind of litigation.

The SEC settlement followed Musk’s tweet in August 2018 that he had secured financing to turn Tesla into a private company in a $ 72 billion deal.

Both Musk and Tesla paid $ 20 million separately in civil fines, and Tesla's lawyers agreed to examine some of Musk's tweets before they were published.

The settlement was subsequently revised to clarify when initial approvals were required, prompted by an unverified tweet from Musk about Tesla's production expectations.

The settlement allowed Mask to tweet as desired except when it came to specific events or financial milestones.