A federal judge in San Francisco rejected for the second time a securities fraud lawsuit brought by Tesla Inc shareholders accusing the company of misleading comments regarding the production status of its Model 3.
U.S. District Judge Charles Breyer dismissed the lawsuit brought in October 2017. Breyer dismissed the original lawsuit in August but permitted plaintiffs to file an amended one.
It stated shareholders purchased “artificially inflated” shares because CEO Elon Musk and other executives misled them with optimistic statements about the production increase of the Model 3, failing to reveal that the company was “woefully unprepared” for the vehicle’s production.
Tesla argued in its defense that it had been forthcoming regarding obstacles with Model 3 production, including repeated statements by Musk that Tesla was going through “production hell”.
Breyer wrote that the accusations of fraud ignored automaker’s “repeated warnings about Model 3 production risks.”