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
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
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.
Case Name: Read More
Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720
Case Name 1: The Kraft Heinz Company
Cornerstone Research has released its yearly securities
class action litigation report and found dramatic increases in the number of
settlements and in the average settlement pools. (The link to the full report
Cornerstone focused on federal securities class actions, specifically cases al... Read More
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