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Tesla investor sues Musk, board over tweets

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New legal troubles for Tesla CEO Elon Musk and his board of directors.

A shareholder lawsuit was filed, claiming Musk and his board have violated his 2018 settlement with the Securities and Exchange Commission over his Twitter habits.

The lawsuit unsealed Thursday claims Musk's "erratic" tweets, including a post last May that Tesla's stock price was "too high" and the failure of Tesla board's to monitor his tweets as required by the SEC settlement - have exposed shareholders to billions of dollars of losses.

The shareholder complaint seeks to have Musk and other Tesla directors pay damages to the company for breaching their fiduciary duties.

Tesla did not immediately respond to a request for comment.

Musk agreed to give up the chairman role and have his tweets monitored as part of the SEC settlement stemming from a controversial tweet in August 2018, when he claimed he had "funding secured" to take the electric car maker private.

That set off a war of words between the SEC and Musk, which ended in Musk and Tesla agreeing to pay $20 million in civil fines as part of the settlement.

But Musk's reputation since then has soared with investors, along with his company's stock price. Shares of Tesla have rocketed six-fold over the past year, giving it a market value that's more than General Motors, Ford, Volkswagen and Toyota - combined.

Video Transcript

- New legal troubles for Tesla CEO Elon Musk and his board of directors. A shareholder lawsuit unsealed late Thursday accuses Musk and his board of violating his 2008 settlement with the Securities and Exchange Commission over his Twitter habits. The legal complaint cites Musk's, quote, "erratic" tweets, including a post last May that Tesla's stock price was, quote, "too high" and that the failure of Tesla's board to monitor his tweets as required by the SEC settlement have exposed shareholders to billions of dollars of losses. The shareholder complaint seeks to have Musk and other Tesla directors pay damages to the company for breaching their fiduciary duties.

Tesla did not immediately respond to a request for comment. Musk agreed to give up the chairman role and have his tweets monitored as part of the SEC settlement, stemming from a controversial tweet in August 2018 when he claimed he had, quote, "funding secured" to take the electric carmaker private. That set off a war of words between the SEC and Musk, which ended in Musk and Tesla agreeing to pay $20 million in civil fines as part of the settlement. But Musk's reputation since then has soared with investors along with his company's stock price. Shares of Tesla have rocketed six-fold over the past year, giving it a market value that's more than General Motors, Ford, Volkswagen, and Toyota combined.