Investors V Tesla Corporation. A Class action suit! [View all]

This needs to happen tomorrow. If your 401k took a hit because of the poor leadership of the Tesla Board of Directors.... YOU CAN AND SHOULD SUE.

Just don't hire Paul Weiss and Associates... they're busy with some pro bono work.

⚖️ Legal Case Against Tesla (and Elon Musk)
On Behalf of Shareholders Who Suffered Financial Harm Due to Reckless Conduct and Board Inaction
I. Overview
We, the undersigned shareholders of Tesla, Inc. (TSLA), bring this action as a proposed securities fraud and breach of fiduciary duty class action, alleging that Elon Musk’s erratic behavior, political extremism, and violation of corporate norms directly harmed Tesla’s valuation. Further, the Tesla Board of Directors failed in their duty to act in shareholders' best interests, enabling this misconduct.

II. Legal Foundations
A. Securities Fraud – Rule 10b-5 (under the 1934 Securities Exchange Act)
To prove securities fraud, we must establish:

A material misrepresentation or omission
Scienter (intent or recklessness)
A connection with the purchase or sale of a security
Reliance on the misrepresentation
Economic loss
Loss causation

Elon Musk’s public behavior constitutes reckless misrepresentation of Tesla’s leadership quality and future, misleading the market.
B. Breach of Fiduciary Duty
Corporate executives and directors owe duties of:

Care
Loyalty
Good faith

The Tesla board failed to monitor or discipline Musk’s behavior, allowing repeated reputational harm, thereby violating their fiduciary duty to shareholders.
C. Corporate Waste & Mismanagement
Tesla’s board allowed Musk to:

Use Tesla’s brand to promote personal agendas (X/Twitter)
Engage in erratic, damaging public behavior
Prioritize personal ventures (SpaceX, xAI, Neuralink) while Tesla suffered

III. Specific Incidents as Evidence
Here’s a timeline of public actions that arguably caused material harm to TSLA’s share price and public reputation:

Date Incident Effect on TSLA/Market

Nov 2022 Musk acquires Twitter, sells ~$4B in TSLA stock Share price declines sharply, concerns over divided focus

Dec 2022 Musk reinstates banned accounts, engages in culture war politics Institutional investors begin exiting; reputational decline 2023 Increasing political posts on Twitter/X, including antisemitic, sexist, and conspiratorial content Major advertisers boycott X; Tesla brand suffers by association

Q4 2023 TSLA misses delivery targets; Musk blames "woke culture" Deflection raises governance concerns

an–Feb 2024 Musk makes threats to take AI development away from Tesla unless he gets more control Perceived as hostage-taking; stock volatility increases

March 2024 Musk posts meme content from Tesla’s official channels

Market perceives leadership as unserious, Ongoing Musk promotes other ventures (xAI, Neuralink) more than Tesla appears neglected, long-term vision unclear

IV. Comparable Legal Precedent
In re Tesla Inc. Stockholder Litigation (Del. Ch. 2022)
Allegations of self-dealing and board failure re: SolarCity acquisition.
Court found Elon Musk exerted undue influence on Tesla board.
Precedent that Musk does not respect corporate governance, and the board enables him.

In re Twitter Inc. Shareholders Litigation
Twitter executives held accountable for misleading shareholders about bot numbers and user metrics.
Shows importance of truthful public statements and transparency, even on social media.

SEC v. Musk (2018)
Musk falsely tweeted “funding secured” to take Tesla private.
Settled with SEC for $20M, required board oversight on tweets.
This case alone proves: He knew the risks of social media statements. Tesla was legally required to monitor and prevent future incidents.

The fact that Tesla did not enforce the terms of that settlement opens it up to renewed liability.
V. Loss Causation & Shareholder Harm
TSLA stock dropped over 50% from peak, much of it due to brand damage, erratic leadership, and investor mistrust, not operational performance.
Institutional investors (e.g., Vanguard, BlackRock) publicly reduced Tesla exposure citing governance risk.
Retail investors, especially retirees and long-term holders, lost significant retirement savings.

VI. Relief Requested
Monetary Damages
Governance Reforms
Injunctive Relief
Disclosure Reforms

VII. Call to Action
We are building a class of shareholders to formally file this suit. If you are a shareholder who has:

Held TSLA stock during Musk’s political and erratic behavior (2022–2024),
Suffered a material loss in your portfolio,
And believe that Musk’s conduct—not fundamentals—caused that damage,

📝 Join the class action: 📩