Tesla files countersuit against JPMorgan, accuses bank of 'illegitimate machinations'
The automaker is seeking to dismiss JPMorgan’s earlier lawsuit.
Tesla filed a counterclaim against JPMorgan Chase Monday, the latest salvo in an ongoing battle between the electric automaker and the country’s biggest bank.
The lawsuit accused JPMorgan of filing “cynical litigation” when the bank sued Tesla last year, claiming it was owed $162 million when Tesla stock warrants expired.
In its counterclaim, Tesla accused JPMorgan of deploying “illegitimate machinations” and is seeking a declaratory judgment that it does not owe the bank the additional funds.
“Last year, JPM obtained billions of dollars’ worth of shares of Tesla’s common stock for a bargain price that the parties negotiated in 2014. Not content with this multibillion–dollar gain, JPM now seeks, through this cynical litigation, to extract an additional nine-figure windfall from Tesla,” the lawsuit said.
The legal dispute began after Tesla’s Elon Musk posted on Twitter that he was considering taking the company private. He took back the statement but was sued by securities regulators. Musk and the SEC settled for $20 million. Part of the settlement required him to step down as chairman of the company’s board of directors.
“JPM took improper advantage of a Twitter post from August 7, 2018 – nearly three years before the Warrants’ exercise dates – in which Elon Musk stated that he was considering taking Tesla private. Ten days after that tweet, JPM falsely asserted that the tweet constituted an announcement by Tesla of an extraordinary corporate transaction,” Tesla’s lawsuit said.
The stock warrants were arranged after JPMorgan handled a 2014 transaction for Tesla and allowed the bank to buy shares of the automaker at a fixed price, below market value, for a period of years. JPMorgan claimed Musk’s tweet impacted the value of those shares, leaving the bank entitled to an additional $162 million.
Tesla, which is represented by Quinn Emanuel's Alex Spiro, the lawyer who successfully defended Musk from a defamation claim, is seeking to dismiss JPMorgan’s earlier lawsuit.
JPMorgan told ABC News in a statement, “There is no merit to their claim. This comes down to fulfilling contractual obligations.”
The dueling lawsuits add to the personal animus between Musk and JPMorgan’s CEO Jamie Dimon. Musk prefers to do business with other banks and JPMorgan recently inked a deal to be the primary lender to Tesla rival Rivian, The Wall Street Journal reported.
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