Court selects lead plaintiff and lead counsel for multimillion-dollar lawsuit against Tesla CEO Elon Musk

By Charmaine Little | Dec 5, 2018

SAN FRANCISCO — A federal court ruled to consolidate cases involving Tesla CEO Elon Musk, who allegedly made false statements that he acquired enough money to take his company private.

On Nov. 27, the U.S. District Court for the Northern District of California granted the plaintiffs’ motions to consolidate, as well as a plaintiff’s motion to serve as lead plaintiff.

U.S. District Judge Edward M. Chen pointed out in his ruling that the Private Securities Litigation Reform Act requires a consolidation decision for cases with the same claims before choosing a lead plaintiff.

Since the related cases all accuse Musk of making misleading statements that he had secured enough money to take Tesla private (causing a “trade frenzy that drove up the value of Tesla’s shares,” according to the opinion), the court granted the consolidation.

The court then ruled on the seven competing motions to select a lead plaintiff. While there were initially nine, two of them were withdrawn. The remaining seven parties that vied for the lead plaintiff role are Tempus International Fund and Opportunity Unique Fund, Inc. (claiming a loss of $15.8 million), Tesla Investor Group (claiming a loss of $4.4 million), Bridgestone Investment Corporation, Ltd. (claiming a loss of $3.8 million), Glen Littleton (claiming a loss of $3.5 million), Dany David, James Johnson and FNY Investment Advisers, in order of greatest to smallest loss.

The court did not detail David, Johnson’s or FNY’s losses after it determined Littleton was best to serve as lead plaintiff.

It determined that Littleton possessed the biggest financial interest and that his interest would include many of the people, organizations and businesses that would be a part of the class.

The court also granted Littleton’s selection for lead counsel, Levi & Korinsky. Aside from being Littleton’s top choice, the court also added that the company already has lots of history in dealing with securities fraud lawsuits and has been given the lead counsel title for other related litigations.

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