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A former Tesla Inc. (TSLA) employee and self-proclaimed whistleblower agreed to pay the electric automaker $ 400,000 to settle the company’s lawsuit over allegations that the former worker’s disclosure of confidential information resulted in a its share price fell by $ 167 million.
As part of the settlement, the former employee also admitted that the counterclaims in response to the lawsuit were funded by Tesla’s short seller, Cable Car Capital LLC.
Tesla sued Martin Tripp, a former Nevada Gigafactory employee, in 2018, alleging he hacked a confidential manufacturing operating system, stole more than several gigabytes of data, and disclosed trade secrets to a reporter.
The company further alleged that Tripp lied to the media by claiming that punctured battery cells were installed in some Model 3 vehicles delivered to unsuspecting customers – a claim Tesla denies. Tesla also says Tripp has exaggerated the levels of scrap used in its vehicle manufacturing process.
In addition to the broader settlement, Tripp also agreed to pay Tesla $ 25,000 in penalties over Tripp’s violation of the Nevada District Court’s protection order requiring him to refrain from disclosing related information. to confidential documents. Tripp also agreed to destroy any documents he acquired through his work at Tesla.
A sharp drop in the share price for “ two short-term windows ”
In September, the court allowed Tesla’s petition to suppress the counterclaims raised by Tripp, alleging that company CEO Elon Musk and others at Tesla defamed him and threw him under. a fake day in various emails and tweets.
Yahoo Finance has requested feedback from Tesla, as well as Tripp and Cable Car Capital, and will update this story with any responses it receives.
Tripp’s revelations, Tesla argued, caused Tesla’s market capitalization to drop $ 167 million over a two-day period in June 2018. Additionally, the company said it hired around $ 250,000 to investigate the case and that it was owed $ 7,385 for wages that Tripp should not have been paid due to his alleged breach of loyalty. Tesla’s damage analyst speculated that the $ 167 million drop was linked to two articles written by Linette Lopez of Business Inisider – one from June 4 calling Tesla production a “nightmare” and the another from June 6 claiming that its Gigafactory robots were not yet working.
“In the brief trading period between the publication of each of the June 4 and June 6 articles and the close of the NASDAQ trading day, Tesla’s market capitalization declined by $ 34 million. and $ 134 million, respectively, or $ 167 million in total over these two short-lived windows, ”the file said.
In August 2019, then Tripp’s attorney, Robert Mitchell, told Yahoo Finance: “This is phantom damage in our opinion.”
During court filings, Tripp denied Tesla’s claims. In July 2018, he filed official advice with the United States Securities and Exchange Commission, which reiterated allegations he made to the media, including a claim that Tesla lied to investors about his vehicle production figures.
Tesla characterized Tripp as a former low-performing employee who became unhappy after being fired from the company.
Previous tweets posted to Tripp’s Twitter account showing images of punctured Tesla batteries have been deleted.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
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