JP Morgan sues Tesla for more than US $ 162 million and Elon Musk sells more shares – La Tercera

Elon Musk’s sell-off of Tesla Inc. shares continued for a second week, with the automaker’s chief executive selling more than 934,000 shares worth about $ 930 million on Monday, while also exercising options. purchase, based on new disclosures.

Meanwhile, JP Morgan Chase & Co. filed a lawsuit against Tesla on Monday alleging breach of contract on guarantees (or warrants) on shares that expired this year. The financial institution said it seeks to recover more than $ 162 million through the case filed Monday in the United States Court for the Southern District of New York.

JP Morgan says that Tesla was obligated to hand over the bank shares or the money if the automaker’s share price was above the exercise price of the warranties at the time the contract between the companies expired, which was precisely the case. “Tesla has flagrantly ignored its clear contractual obligation to pay JPMorgan in full,” the lawsuit alleges.

The collateral dispute between America’s largest bank and the world’s most valuable automaker is compounded by Musk’s claim in 2018 that he had secured funds to take Tesla out of the stock market, only to have it reversed. statement shortly after. The original claim prompted the Securities and Exchange Commission (SEC) to sue Musk for fraud, leading to several actions against the Tesla boss, including his resignation as Tesla chairman.

JP Morgan twice changed the price of options on the episode, a move Tesla challenged as “unreasonable” at the time, according to the lawsuit. The bank rejected Tesla’s complaint, legal documents say, arguing that its moves to adjust collateral prices were contractually required. Tesla’s stock price at the time the guarantee expired this year was above the original, adjusted strike prices (or strike prices), the bank says in the lawsuit.

Tesla did not respond to a request for comment on the case.

Monday’s sales mean Musk has sold about 7.3 million Tesla shares valued at roughly $ 7.8 billion since noting just over a week ago that he would divest up to 10% of his shares in the company.

The latest sales came after Musk, the world’s richest person, mocked Senator Bernie Sanders (Independent, Vermont.) Last weekend after the former presidential candidate tweeted that the super-rich should pay a fee. fair share of tax.

“We must demand that the extremely wealthy pay a fair share. Period, ”Sanders tweeted Saturday afternoon.

“I keep forgetting that you’re still alive,” Musk replied. You want me to sell more stock, Bernie? Just say the word … “, he stated in a reply to the tweet.

A representative for Sanders did not immediately respond to a request for comment. Musk did not respond to requests for comment.

Musk, at the time, had sold approximately $ 6.9 billion worth of Tesla stock during that week, one of the largest stock sales in history by a CEO in a span of several days. The sale came after Musk asked his followers earlier this month, via a Twitter poll, if he should sell 10% of his Tesla stock. People voted in favor of the sale. Musk, prior to the survey, had already scheduled the first stock sale.

Musk has a net worth of about $ 279 billion, the richest person on the Bloomberg Billionaires Index, ahead of the second richest, the founder of Inc., Jeff Bezos, who has an estimated wealth of $ 203 billion.

The Twitter exchange between Musk and Sanders also comes as Democrats and the White House have been trying to sign the Build Back Better plan into law, which – among other things – would raise taxes on very high-income Americans and the big ones. Business. Sanders, a Vermont independent who ran against President Biden in the 2020 Democratic presidential race, has been in favor of raising tax rates on companies that have large differences between what their workers and CEOs earn.

Musk’s statements on social media have previously drawn scrutiny. In 2018, he tweeted about a possible purchase of Tesla that led the Securities and Exchange Commission (SEC) to enforce a sanction-agreement with the company alleging that the CEO had committed fraud through his tweet. Musk and Tesla had to pay $ 20 million each to solve the case.

It was also agreed that Tesla’s lawyers previously approved the public statements that he disseminated through social networks. The Wall Street Journal reported earlier this year that the SEC informed Tesla in 2020 that Musk’s use of Twitter had violated that policy twice.

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JP Morgan sues Tesla for more than US $ 162 million and Elon Musk sells more shares – La Tercera