Tesla Motors Inc (TSLA) Faces Class Action Suit

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Tesla Motors Inc (TSLA) Faces Class Action Suit
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A law firm has announced that it has filed a class action lawsuit against Tesla Motors Inc (NASDAQ:TSLA). Levi & Korsinsky is also seeking a lead plaintiff in the case filed on behalf of certain Tesla Motors Inc (NASDAQ:TSLA) investors.

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Tesla investors not batting an eye

A quick search of the web reveals a nearly unending list of lawsuits which are very similar the one they have filed against Tesla. Most of the press releases are worded nearly the same. In short, if you’ve heard a controversy of any kind about a company over the last year, Levi & Korsinsky might be suing them. A couple of the biggest names you might have heard of are NQ Mobile Inc (ADR) (NYSE:NQ) and Herbalife Ltd (NYSE:HLF), but there are many more.

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Shares of Tesla Motors Inc (NASDAQ:TSLA) rose more than 2% in trading today in spite of the announcement about the lawsuit last night. It would seem that at least for now, this case isn’t enough to scare investors.

Tesla accused of “false and / or misleading statements”

This suit against Tesla alleges that the company made statements which were false or misleading in connection with the safety of the Model S sedan. The case mentions the Model S fires which were caused when the vehicles ran over a piece of metal in the road. The metal punctured the battery compartment, sparking a fire. The firm also alleges that “the Model S suffers from material defects which have caused the battery pack to ignite and erupt into flames under certain conditions.”

One thing that could have bearing on this case is whether the National Highway Traffic Safety Administration decides there are any material defects in the Model S. Tesla already got the green light from German regulators after their investigation into the Model S fires. The NHTSA is still investigating.

Tesla not keeping up with demand

And if you weren’t worried at all about the Model S fires, the firm tacked on another potentially unrelated claim. It said Tesla Motors Inc (NASDAQ:TSLA) “was unable to maintain a level of deliveries sufficient to satisfy analyst concerns and compensate for other declining revenue streams.” (Good grief, if every company got in trouble for disappointing analysts, Wall Street would probably be mighty empty)

Anyhow, investors who want to join the class action suit have until Jan. 7 to request that they be appointed lead plaintiff. The case covers investors who bought shares of Tesla Motors Inc (TSLA) between May 10 and Nov. 6 of this year.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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8 COMMENTS

  1. Levi your BS Pomerantz at something else. You are drunk driving your Korsinsinski through a cement wall, onto a tree, and you are about to catch on fire if you don’t back off. The world is watching, and you are making a… out of yourselves.

  2. This suit is classic example of ambulance chasing. Pathetic. An embarrassment to the legal profession. The idea that Tesla has been hiding information about the venerability of its battery system is pure fiction. Tesla went above and beyond in the design of its battery, with multiple safety systems to prevent overheating under normal operating conditions. If these safety systems become compromised due to an accident, there is always the risk that lithium cells could overheat and catch fire. The same risk exists in any lithium powered vehicle. Lithium cells are flammable–just not as flammable as gasoline. The risk of injury by fire will always be greater in a gas powered car than it is in a Tesla.

  3. Didn’t you mean ” Law firms X and Y are making a—- of themselves by suing Tesla, which has blown everyone away with their incredible success”

  4. Actually, I’d like to see an angle where investors SUE THE MASS TORT LAWYER for false and misleading allegations based on unjustified facts that damage the value of their investments. Any lawyers up for the task? I’ll provide you with a lead plaintiff.

  5. I’m sorry, but anyone who bought shares of TSLA are most likely EXTREMELY happy with the way the stock is performing. These lawyers are desperate scum!

  6. Whatever BS law firm this is, I hope your firm goes under… Elon and Tesla are awesome. I am very fond of Elon and his ideas. I love the fact he is so young and so far ahead in this game. My next vehicle will definitely be a Tesla. I would also love to experience interplanetary travel before I pass. I wish people would stop fighting this company and support it so in the end we will make our world a better place to live.

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