Rachel Stone, 16 April 2021
A pension fund voluntarily ended its proposed class action against Tesla and its multibillionaire founder, Elon Musk, which claimed the automaker and a group of big banks acting as underwriters misled investors on a $1.8 billion bond offering.
Inter-Local Pension Fund GCC/IBT has bowed out of its securities fraud suit in California federal court following a decision in the Ninth Circuit in March not to rehear a related case, according to a notice filed Thursday.
According to an October 2019 order, U.S. District Judge Charles R. Breyer held that the pension fund’s case was related to the Wochos v. Tesla Inc. case. Wochos saw investors claim Tesla and its executives failed to disclose information about production delays with its Model 3 sedan and caused share prices to plummet. Judge Breyer’s order stipulated that if “the U.S. Court of Appeals for the Ninth Circuit affirms this court’s judgment dismissing the Wochos litigation, [the pension fund] will dismiss this action with prejudice” 30 days after the appeals court decision.
The pension fund’s case, which was removed to California federal court in December 2018, claimed Tesla violated federal securities laws and the California Corporation Code by failing to disclose in its offering circular known delays in the production of its Model 3 cars. The model was intended to be the company’s first mass-produced electric vehicles.