His “misstatements” have hurt the company and its shareholders, the suit alleges.
Elon Musk’s Twitter antics have landed him in trouble — again.
Law firm Grant & Eisenhofer sued the Tesla and SpaceX CEO on behalf of investors Friday, alleging Musk’s “ongoing unchecked misstatements on Twitter have continued to harm the company and its shareholders,” according to a statement.
Tesla didn’t immediately respond to a request for comment.
The suit, filed in Delaware Court of Chancery, wants to stop Musks’ “unchecked use of Twitter to make inaccurate statements” about Tesla. Grant & Eisenhofer is representing the Laborers’ District Council and Contractors’ Pension Fund of Ohio.
In August, the SEC filed a lawsuit against Musk after he tweeted that he was considering taking the company private. The tweet surprised investors, analysts and Tesla’s board of directors, and he eventually backtracked on the statement. In September, Musk settled with the SEC and agreed to pay a $20 million fine. He also stepped down as chairman of the company’s board.
In February, Musk was in hot water again after the SEC asked a court to hold him in contempt when he tweeted Tesla would make around 500,000 cars in 2019.
“Mr. Musk has continually disregarded all efforts to rein in his material misstatements on social media,” Grant & Eisenhofer director Michael Barry said in the statement. “He has ignored federal court orders, a settlement with the SEC, and even his company’s own corporate policies expressly requiring that any of his tweets regarding Tesla be pre-screened. His conduct has not only cost Tesla shareholders dearly but threatens to expose the company to even greater liability and litigation in the future.”
A public version of the lawsuit, which was filed under seal, should be available by March 12, according to the firm.
Date: March 13, 2019