For Tesla and Musk scored a slam dunk win.
For the second time, a federal judge in San Francisco has dismissed a securities fraud lawsuit brought on by Tesla Inc’s shareholders alleging that the company made misleading comments on the production status of its Model 3.
U.S. District Judge Charles Breyer sided with Tesla, and allowed the plaintiffs to file an amended one.
The lawsuit stated shareholders bought “artificially inflated” shares since Musk and other Tesla executives misled them with bullish statements about the production ramp of the Model 3 and failed to disclose that the company was “woefully unprepared” for the vehicle’s production.
In its defense, Tesla stated, it had been very forthcoming on its production challenges with the Model 3; Musk had repeatedly issued statements that Tesla was undergoing “production hell.”
U.S. District Judge Charles Breyer wrote, the allegations of fraud ignored Tesla’s “repeated warnings about Model 3 production risks.”