Tesla and Elon Musk hit by fresh lawsuits over stock rigging claims

Investors sue Tesla's Musk over go-private tweets

Tesla and Elon Musk hit by fresh lawsuits over stock rigging claims

Two class actions suits have been filed against Elon Musk, the Founder and CEO of electric auto manufacturing company, Tesla Inc and the company itself.

Mr Isaacs and the second plaintiff, William Chamberlain, have alleged that Tesla's stock price was artificially inflated and federal securities laws had been breached.

In one of the lawsuits, the plaintiff Kalman Isaacs said Musk's tweets were false and misleading, and together with Tesla's failure to correct them amounted to a "nuclear attack" created to "completely decimate" short-sellers. Then it fell back, losing about 7 per cent over two days, as doubts mounted about the feasibility of the going-private idea - and about the chief executive officer's declaration that funding was already in place.

Musk's August 7 tweets helped push Tesla's stock price more than 13 percent above the prior day's close.

On Wednesday, several members of Tesla's board issued a statement to say they had been informed of Musk's intentions a week before the news was made public.

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"Am considering taking Tesla private at $420". The remark set off a frenzy of trading in Tesla shares, even as investors were struggling to discern whether the tweet was legitimate and what precisely it meant.

Musk has not offered evidence that he has lined up the necessary funding to take Tesla private, and the complaints did not offer proof to the contrary.

One plaintiff Kalman Isaacs said the tweets were false, misleading and they amounted to a "nuclear attack" created to "completely decimate" short-sellers.

As a result, Tesla shares jumped 11 percent, causing so-called short-sellers who have been betting on the stock crashing for years to lose millions.

Isaacs claims that Tesla's volatility on Wall Street after the Twitter storm has cost shareholders shorting the stock hundreds of millions of dollars, and caused all Tesla securities purchasers to pay inflated prices over the three-day period leading up to Friday 10 August.

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