A California judge this week dismissed a class-action lawsuit brought by Tesla shareholders alleging the company and its CEO, Elon Musk, defrauded investors by lying about the effectiveness of its self-driving technology.
On Monday, U.S. District Judge Araceli Martinez-Olguin ruled that the shareholders failed to prove that Tesla’s leaders lied about its Autopilot and Full Self-Driving technologies being safer than humans to boost the stock price.
The judge also said the plaintiffs didn’t show that Tesla’s driver assistance programs were “plagued with safety issues” or that they encouraged distracted driving.
Additionally, Judge Martinez-Olguin ruled that Mr. Musk’s statements and actions didn’t prove he knew more about the technology than he told the public. The plaintiffs argued that the CEO inflated Tesla’s stock price by lying about the capabilities of FSD and Autopilot only to sell $34 billion worth of company stock from 2019-23.
“As a result of defendant’s wrongful acts and omissions and the precipitous decline in market value of the company’s common stock, plaintiff and other class members have suffered significant losses and damages,” the complaint reads.
While the case’s dismissal is a victory for the company, Tesla still faces legal probes into its self-driving technology. The Justice Department and Securities and Exchange Commission are probing the electric vehicle giant’s claims regarding the capabilities of its driver assistance programs.
Also, the National Highway Traffic Safety Administration is investigating hundreds of collisions involving Tesla cars engaged in Autopilot or Full Self-Driving.
• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.
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