JPMorgan is suing Tesla over $ 162 million in arrest warrant litigation


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JP Morgan Chase filed a lawsuit against electric vehicle maker Tesla on Monday in a dispute over arrest warrants, according to court records. The bank is charging $ 162.2 million plus interest, attorney fees and expenses.

JP Morgan claims Tesla violated the terms of a contract the companies signed to revalue the warrants.

Tesla should deliver stock or cash if its stock price climbed above a contracted “exercise price” by a certain expiration date, the lawsuit said.

But a dispute arose when JP Morgan adjusted the value of the warrants when Tesla CEO Elon Musk tweeted in August 2018 that he was considering taking the company private for $ 420 a share, and again when he came up with the idea a privatization of Tesla withdrew a few weeks later. JP Morgan claims it has a contractual right to make these adjustments, while Tesla said in a letter that they were “inappropriately quick and represented an opportunistic attempt to capitalize on the volatility of Tesla stock,” according to the filing.

Over the next 16 months, Tesla stock hit a three-year low of just under $ 177 per share in June 2019, before rocketing above $ 420 per share in December of that year. Musk was later charged with securities fraud by the SEC. Tesla and Musk agreed to pay $ 20 million each to settle the lawsuit.

Tesla stock closed at $ 1,013.39 on November 15.

The complaint states, “In total, Tesla failed to deliver 228,775 common shares, so JPMorgan has an open hedge position equal to that shortfall.”

Read the full complaint here.