JPMorgan Chase sued Tesla for $162 million on Monday, accusing the carmaker of breaching a contract on a stock warrant after CEO Elon Musk tweeted about taking the company private in 2018. The latest fall from a media post in which the billionaire was accused of securities fraud.
JPMorgan alleged that Tesla “explicitly” violated the terms of the contract relating to stock warrants, according to a lawsuit. filed Monday in the Southern District of New York.
According to court documents, Tesla sold JPMorgan stock warrants in 2014 and agreed to deliver shares or cash if the price of their stock was above a set price by expiration, in light of major corporate transactions with the bank’s provisions. To adjust the price in such as merger or taking the company private.
JP Morgan adjusted the value of the warrant when Musk tweeted He was considering taking Tesla private and was “funding secure,” according to the filing, when Musk withdrew the idea weeks later.
When the warrants expired this year, the stock price had risen significantly and was “well above” the strike price, JPMorgan said, although Tesla “refused to settle on a contractual strike price.”
According to court documents, Tesla claimed the bank was “unreasonably quick” and “opportunistic” in its adjustments to “take advantage of changes in volatility in Tesla’s stock”.
JPMorgan said it is seeking more than $162 million, along with expenses and legal fees.