Lawsuit accuses Tesla’s Musk of fraud over tweets, going-private proposal

Tesla founder Elon Musk's announcement that he was considering taking the electric automaker private has jacked up the company's shares by 5.9 percent to $361.87. (AFP / Robyn Beck)
Updated 11 August 2018
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Lawsuit accuses Tesla’s Musk of fraud over tweets, going-private proposal

SAN FRANCISCO, US: Tesla Inc. and Chief Executive Elon Musk were sued on Friday by an investor who said they fraudulently engineered a scheme to “completely decimate” short-sellers, including through Musk’s proposal to take the electric car company private.
The complaint filed by Kalman Isaacs said Musk’s alleged false and misleading tweets on Aug. 7 about a possible going-private transaction, and Tesla’s failure to correct them, were a “nuclear attack” on short-sellers that inflated Tesla’s stock price and violated federal securities laws.
Tesla did not respond to a request for comment on the proposed class-action complaint filed in the federal court in San Francisco. The company is based in nearby Palo Alto, California.
Short-sellers borrow shares they believe are overpriced, sell them, and then repurchase shares later at what they hope will be a lower price to make a profit.
Such investors have long been an irritant for Musk, who has sometimes used Twitter to criticize them.
Musk’s Aug. 7 tweets, including when he said there was “funding secured” to possibly take Tesla private, helped push Tesla’s stock price more than 13 percent above the prior day’s close.
The stock has since given back more than two-thirds of that gain, in part following reports that the US Securities and Exchange Commission had begun inquiring about Musk’s activity.
Musk has not offered evidence that he has lined up the necessary funding to take Tesla private, and the complaint did not offer proof to the contrary.
But Isaacs said Tesla’s and Musk’s conduct caused the volatility that cost short-sellers hundreds of millions of dollars from having to cover their short positions, and caused all Tesla securities purchasers to pay artificially inflated prices.
Tesla’s market value exceeds $60 billion, and its shares closed Friday up $3.04 at $355.49. Musk had tweeted that Tesla could go private for $420 per share.
According to the complaint, Isaacs bought 3,000 Tesla shares on Aug. 8 to cover his short position. The proposed class period begins on the afternoon of Aug. 7, and ends the next day.
The case is Isaacs v Musk et al, US District Court, Northern District of California, No. 18-04865. (


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
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Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.