Long-Term Investor Alert: Lawsuit against Directors of Tesla Motors Inc (NASDAQ:TSLA) filed
Filed Under: Business, Financial Markets | Posted: 08/05/2014 at 11:45AM
Comments | Region: California | United States
The Shareholders Foundation announces that a current long-term investor in shares of Tesla Motors Inc (NASDAQ:TSLA) filed a lawsuit against directors of Tesla Motors over alleged breaches of fiduciary duties.
Investors who are current long term investors in Tesla Motors Inc (NASDAQ:TSLA) shares have certain options and should contact the Shareholders Foundation at email@example.com or call +1(858) 779 – 1554.
The plaintiff alleges that the defendants caused the company to issue false statements and that certain executives of Tesla Motors Inc failed to ensure that the company maintained adequate internal controls and oversight mechanisms. The plaintiff claims that Tesla Motors Inc’s first vehicle, the Telsa Roadster, sold just 2,500 models from 2008 to 2012, while its second vehicle, the Tesla Model S, launched in 2012, sold just 25,000 by December 2013 and that by summer 2013 Telsa motors never reported a profit on its audited GAAP financial statements. The plaintiff says that certain executives of Tesla Motors Inc allowed the company to embark on a campaign of false and misleading statements designed to convince the market that the Model S was the safest car in existence, that it had outscored other five-star automobiles and that it had achieved a record composite score.
In October 2013, a Model S burst into flames following a purported collision, with Tesla Motors Inc later admitting that the fire began in its battery pack. Shares of Tesla Motors Inc (NASDAQ:TSLA) declined from over $194 per share in late September to $168.26 per share on Oct. 3, 2013.
In November 2013, Tesla confirmed a third Model S fire, caused by impact with road debris during normal driving conditions. NASDAQ:TSLA shares declined from $179.70 per share on November 5, 2013, to $132.60 per share on Nov. 8, 2013.
Tesla Motors Inc currently faces a lawsuit over alleged securities laws violations. According to that complaint filed in the U.S. District Court for the Northern District of California the plaintiff alleges that Tesla Motors Inc violated the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the plaintiff alleges that between May 10, 2013 and November 6, 2013 defendants made allegedly false and misleading statements and allegeldy failed to disclose material adverse facts about the Tesla Motors Inc’s business, including that Tesla Motors Inc’s statements about the Model S’s highest safety rating and its lack of prior fire incidents were materially misleading, due to undisclosed puncture and fire risks in its undercarriage and lithium ion battery pack, that the Model S suffered from material defects which caused the battery pack to ignite and erupt in flames under certain driving conditions, that Tesla Motors Inc’s future sales, its next generation Model X introduction, and its stock price were extremely vulnerable to the inherent risk posed by the Model S’s undercarriage and battery pack design flaws, that Tesla Motors Inc’s was unable to maintain a level of automobile deliveries sufficient to satisfy analyst concerns and compensate for other declining revenue streams, and that as a result of the foregoing, Tesla Motors Inc’s public statements were materially false and misleading at all relevant times.
On July 4, 2014, a stolen Tesla Model S burst into flames after it had crashed into a pole in Southern California. After the crash, the batteries of the Tesla S reportedly spread around in clumps on the street and began to burn, some reportedly popping like fireworks and shooting into the air. Shares of Tesla Motors Inc (NASDAQ:TSLA) declined from $244.15 per share on June 30, 2014 to $220.67 during July 7, 2014.
Those who purchased shares of Tesla Motors Inc (NASDAQ:TSLA) have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
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