Tag Archives: Lawsuit
(Reuters) – Tesla Inc and Chief Executive Elon Musk were sued on Friday by an investor who said they committed securities fraud in a scheme to “completely decimate” short-sellers that included Musk’s proposal to take the electric car company 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
The proposed class-action complaint filed by Kalman Isaacs in San Francisco federal court accused Tesla and Musk of trying to artificially manipulate the company’s stock price.
It said this occurred largely through a series of tweets by Musk on Aug. 7, including when he said he might take Tesla private and that there was “funding secured.”
Musk’s tweets helped push Tesla’s stock price more than 13 percent above the previous day’s close.
The stock has since retreated, in part following reports that the U.S. Securities and Exchange Commission had begun inquiring about Musk’s activity.
Tesla did not respond to a request for comment.
Isaacs accused Musk of making false and misleading statements to inflate Tesla’s stock price, and that Tesla “doubled-down” on those statements by failing to correct them.
According to the complaint, Isaacs bought 3,000 Tesla shares on Aug. 8 to cover his short position, or bet that the price would decline, in the company.
The complaint said the class period begins on the afternoon of Aug. 7, when the defendants launched their “nuclear attack” on short-sellers, and ends the next day.
Reporting by Jonathan Stempel in New York; Editing by Rosalba O’Brien
(Reuters) – A second lawsuit was filed this week against the organizers of cybercurrency technology project Tezos, an initiative that raised $ 232 million to issue a cryptocurrency that does not exist and fund development of a transaction system that has no clear end date.
The class action lawsuit, filed in a U.S. District Court in Florida by Coral Springs-based law firm Silver Miller, alleges that Tezos’ organizers broke U.S. securities laws and defrauded and misled participants in the online fundraiser, according to court documents.
Special Report: Read Reuters original investigation into Tezos
Many who put money toward the initial coin offering consider themselves investors, but the funds were raised as non-refundable donations.
The lawsuit was filed on Monday and made public on Wednesday. The defendants are Kathleen and Arthur Breitman, the co-founders of the project; their Delaware-based company Dynamic Ledger Solutions Inc, which owns the rights to the transaction system’s code; and the Tezos Foundation, a Swiss entity that was set up to carry out the fundraiser.
It is the second lawsuit in less than a month to hit the embattled project that in July raised funds in one of the largest ever initial coin offerings, a popular way for technology startups to collect money by issuing cryptocurrencies.
Neither Brian Klein, an attorney for the Breitmans, nor Johann Gevers, president of the Tezos Foundation, immediately responded to requests for comment.
The lawsuit quotes from a Reuters investigation and reports published in October that revealed details of a backroom battle between the Breitmans and Gevers over control of the project. The dispute has delayed the project. (reut.rs/2yGk6IT)
The lawsuit alleges that contributors to the fundraiser were not told that it could take more than three years for the Swiss foundation, which holds the funds, to purchase Dynamic Ledger Solutions and the project’s source code.
This time frame, revealed by Reuters, was not disclosed to investors despite being “a highly material fact,” the lawsuit alleges.
Plaintiffs are asking for a refund as well as damages, according to the lawsuit. It also alleges organizers sold unregistered securities.
“As a result of Defendants’ fraud, false representations and violation of federal and state securities laws in connection with the Tezos ICO, Plaintiff and the Class Members state their demand that the Contract be rescinded and canceled,” the lawsuit states.
Other law firms have said they are considering litigation.
Reporting by Anna Irrera and Steve Stecklow; Editing by Lauren Tara LaCapra and Cynthia Osterman
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