The trial says Tesla, Elon Musk sought to "burn" the sellers in the open

(Reuters) – The prominent short seller Andrew Left sued Tesla Inc. (TSLA.O) and his general manager, Elon Musk, claiming that Musk had fraudulently designed his now-abandoned plan to take Tesla privately to "burn" investors hoping the stock price of the electric car company would fall.

Mr. Left, who heads Citron Research, said in his class action suit Thursday that Musk's issuance of misleading and important misleading information was hurting short sellers and those who hoped Tesla shares would increase.

The shareholders' lawsuit is one of seven targeting at least Musk since he stunned investors on Twitter on Aug. 7, claiming he could take Tesla privately in a $ 72 billion transaction. dollars valuing the company at $ 420 per share. . "

Musk announced on August 24 that Tesla would remain public.

Tesla did not immediately respond to requests for comment on Left's trial, which was filed in San Francisco federal court.

Short sellers are borrowing shares that they believe are too expensive, sell them, and then buy back shares, because they hope their prices will be lower to make a profit.

Musk has long used Twitter to criticize short sellers and Left said his conduct was contrary to federal securities laws.

"The defendant Musk artificially manipulated the price of Tesla securities with objectively false tweets in order to" burn "the company's short sellers," said Left.

"In the days that followed, the truth about the so-called" safe "financing needed to complete the privatization transaction began to appear, revealing the fraudulent scheme," he added.

The proposed course period runs from August 7 to August 17, when Left reported buying and selling millions of dollars of Tesla shares.

This period ended after the New York Times published an interview in which Musk, who owns about a fifth of Tesla, described the severe stress he was facing in front of the company based in Palo Alto, California.

Finally, in the evening of August 24, Friday, Musk, faced with scrutiny by the US Securities and Exchange Commission of the factual accuracy of the "secure" tweet, wrote that Tesla would remain public, citing the investor resistance.

"In a word, I think we should not do that," he wrote.

Tesla shares rose 71 cents to $ 281.45 on Thursday afternoon. They have lost more than a quarter of their value since they hit an intra-day high of $ 387.46 on August 7th.

The case is Left v Tesla Inc. and others, District Court of the United States, Northern District of California, No. 18-05463.