Settlement Fund: $40,000,000
Claim Filing Deadline: September 17, 2022
Class Period: 8/7/2018 -- 8/8/2018
It is one of the most specific
class periods on record for a securities settlement: investors may participate
in the Tesla Fair Fund if they purchased or acquired the company’s common
stock, "between 12:48:16 PM EDT on August 7, 2018 and 4:00 PM EDT on
August 8, 2018."
The end time is clear—4:00 Eastern is when the closing bell rings on the NASDAQ, where TSLA shares are traded. But what happened at precisely sixteen seconds after the forty-eighth minute of the noon hour on the seventh day of August, 2018?
As you may recall, the future owner (maybe) of Twitter was making cryptic comments on Twitter.
"Is Elon Musk serious?" is now a common question as the world watches his attempt to buy the social media company. But during the 48th minute of noon, 8/7/2018, investors were left to parse the meaning of, "Am considering taking Tesla private at $420. Funding secured."
Would he really pay $420 per share, which was a 20 percent premium at the time? Or was it because 420, when pronounced four-twenty, is slang for the supposedly optimum time of day to smoke marijuana?
The answer may be a little of both: Musk thought a 20% premium was fair, and the price was a sophomoric gag. As plaintiffs point out in a related class action, "Musk believed that 20% was a ‘standard premium’ in going-private transactions. Although the precise calculation equaled $419.49, Musk rounded the price up to $420 per share because he thought his girlfriend at the time, Claire Elise Boucher (also known as ‘Grimes’), would find it funny due to the significance of the number to marijuana users."
Over the next few days, Tesla investors went on a "Magic Carpet Ride," as the price went from $343 at open on August 7 to $379.59 at close, down to $370.34 at the close on August 8, and then $352.45 on August 9. (We reference Steppenwolf here because we do not know any Grimes songs.)
The Securities and Exchange
Commission was not amused. The SEC's Enforcement Division began investigating
immediately, and by September 27, 2018 had filed charges. Two days later the
SEC announced a settlement requiring both Tesla and Musk to pay $20 million
each, which three and a half years later comes in the form of this $40 million
The class action based on the now-infamous Tweet is still pending in the Northern District of California, (3:18-cv-04865), and one of hundreds of unresolved cases which CCC is tracking.
In the final days of summer 2021, Twitter announced it had settled a securities suit first launched in 2016. Typically when parties announce the resolution of a securities class action, the settlement materials are posted to the court docket promptly, often within a month. Shortly after that the judge signs a preliminary approval order, ... Read More
Case Name: Amazon.com
Court: Western District of Washington
Case No: 22-CV-00617, 2:22-CV-907
Complaint 1. Anticompetitive Practices
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