NYC to continue Tesla on the alleged violation of Elon Musk of fiduciary duties

New York controller Brad Lander asked the City, who is an important shareholder of Tesla, to continue Tesla and CEO Elon Musk for alleged violations of fiduciary functions.

Lander asked the New York Law Department to pursue disputes against Tesla on behalf of New York’s retirement systems, which holds 3 million shares in Tesla.

The controller said:

“Since Elon Musk took over Doge and has become the best chief friend with President Trump, Tesla – where Musk is supposed to be CEO – suffered financially, causing huge losses for Tesla shareholders. In less than three months, Tesla has lost almost 40% of its value, with losses out of $ 300 million for the failures of New York City. Surveillance, or to require Musk – or someone else – serves as a full -time CEO.

He echoes other recent concerns concerning Musk’s trustee obligations to Tesla’s shareholders.

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Last summer, Tesla’s shareholders continued Tesla for an alleged violation of the fiduciary obligation concerning the threats of channeling Musk’s AI.

In the trial, the shareholders argue that Musk violated his fiduciary tasks towards the shareholders of Tesla by funding Xai, a private AI company, by poaching Tesla employees, threatening not to build AI products in Tesla unless it is the control of the company and for the training of Tesla’s resources.

Now the New York controller accumulates by adding that Tesla and Musk have deceived the role of the CEO in the company in the past year:

Despite the fact of declaring the December 2024 file of Tesla de Tesla that “we are strongly dependent on the services of Elon Musk, the technology of Tesla and our chief executive” and claiming that it “spends a lot of time with Tesla”, Musk clearly abandoned Tesla in favor of the mission of Maga de Doge and President Trump. By wreaking havoc on the law on the reduction of inflation, it takes harmful measures for the electric vehicle market. In addition, he alienated Tesla’s consumer base, which seriously lowered Tesla vehicle sales. Since 2017, New York retirement systems have put Tesla’s board of directors on concerns about corporate governance and leadership, including the lack of full -time CEO.

As a representative of a major shareholder in Tesla, Lander officially asked the New York Law Department to file “a 10B-5 shareholder trial against Tesla, on behalf of New York’s retirement systems, for its important false declarations concerning the leaders of the company”.

Electrek taking

If there is still justice in the United States, I think it is inevitable that Musk is in violation of his fiduciary obligation towards the shareholders of Tesla.

There are so many examples of the poaching of Tesla employees for its private companies to threaten not to build AI products, which, according to him, were essential to Tesla, to literally channel Tesla’s resources in Xai.

And now he agrees with himself so that Xai buy X.

I expect him to push Tesla to invest in XAI at the next Tesla shareholders’ meeting just after having artificially inflated the price with an overly expensive acquisition of Twitter – for the second time.

It’s all madness. I think that the violation of fiduciary obligations would be quite clear, but with the lack of checks and sales in the United States these days, I am not sure that justice will prevail.