JPMorgan Chase sued Tesla for $ 162 million, accusing the automaker of violating a contract for stock warrants after CEO Elon Musk tweeted about the company’s privatization in 2018, the latest fallout from the social media post that saw the billionaire charged with stock market fraud.
- JPMorgan alleges Tesla “flagrantly” violated the terms of a contract for stock warrants, according to a complaint filed in the Southern District of New York.
- According to court documents. Tesla sold stock warrants to JPMorgan in 2014 and committed to deliver shares or cash. If its share price was above a price set at the time of their expiration. With provisions allowing the bank to adjust the price in light of major corporate transactions. Such as mergers or the privatization of the company.
- JPMorgan adjusted the value of the warrants. When Elon Musk tweeted that he was considering privatizing Tesla and had “secure funding,”. According to the filed document, and made a further adjustment. When Elon Musk is returned to this idea a few weeks later.
- When the warrants expired this year, the share price had risen significantly and was “well above” the strike price, JPMorgan said, although Tesla “refused to settle at the contractual strike price.” .
- Tesla claimed the bank had shown “unreasonable haste” and “opportunism” in its adjustments.
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To “take advantage of changes in the volatility of Tesla’s shares,” according to court documents.
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- JPMorgan said it is claiming the more than $ 162 million owed, along with legal expenses and costs.
Elon Musk’s now-infamous tweet has caused chaos for the billionaire and for Tesla. He was sued by the Securities and Exchange Commission and charged. With stock market fraud “for a series of false and misleading tweets”. The regulator felt that Elon Musk had not even discussed. The specific terms of a deal to privatize Tesla, let alone secured funding. Elon Musk and Tesla both agreed to pay $ 20 million to settle the lawsuit. Since 2018, Elon Musk’s social media presence has continued to gain the attention of regulators and, in 2019,