Tesla and Musk Face Securities Fraud Lawsuit Over Self-Driving Technology

tesla and musk face securities fraud lawsuit over self driving technology

Still another day exposes yet another story on Tesla’s self-driving capabilities. This time, Tesla shareholders have started a lawsuit over the testing of its self-driving cars, including those intended for usage as robotaxi services appropriately called ‘Robotaxi.’ Month after the first Robotaxi hits the road, the bookings along with comparable cases in California and Florida, this legal action developed independently of this one.

Targeting both the Tesla brand and its CEO, Elon Musk, a class action lawsuit was filed this week in the U.S. District Court for the Western District of Texas, according to a report by Reuters. According to the complaint, the business and its head have buried test data showing that Tesla’s self-driving capabilities were exaggerated and perhaps dangerous, hence defrauding the stockholders. 

Elon Musk faces lawsuit

Leading the class action is Tesla shareholder Denise Morand of Austin, Texas, who is asking damages for herself as well as for other shareholders for the period from April 19, 2023, to June 22, 2025. Regarding its self-driving systems or safety precautions, Tesla has other legal obstacles. A jury in Florida recently found that Tesla shared at least 33 per cent of the blame for an accident that killed a 22-year-old woman and injured her boyfriend, neither of whom was inside the Tesla car at the time of the collision. 

Though Tesla keeps blaming the driver of its car and plans to appeal the decision, the manufacturer has been instructed to compensate the victims with $243 million in damages. In California, the state DMV has brought a class-action lawsuit against Tesla alleging that the company has misled customers about the features of its Autopilot and Full Self-Driving (FSD). Along with possible compensation for vehicle owners owing to deceptive marketing techniques, the California DMV is looking to suspend Tesla’s vehicle sales license in the state for a term of 30 days. Late July marks the start of this legal fight.

Michael Gooderham is a freelance automotive content writer currently working with AdvisorWheels. He has a background in Automotive Design and several years of experience writing in the same field. Michael specializes in creating well-researched, engaging content related to cars, motorsports, and vehicle design.