New York City Pension Funds Plan to Sue Tesla Over Musk's DOGE Leadership

[BumRushDaShow]

Source: New York Times

April 1, 2025 Updated 10:00 a.m. ET


The head of New York City’s pension funds called for a shareholder lawsuit against Tesla, accusing Elon Musk, its chief executive, of causing the company’s shares to plunge because of his actions to slash spending and the federal work force as head of the Trump administration’s cost-cutting effort.

In a letter sent late Monday to the New York City Law Department and reviewed by The New York Times, Brad Lander, the comptroller who oversees the city’s five public pension funds, said the highly contested cost-cutting measures by Mr. Musk’s initiative, the Department of Government Efficiency, are hurting Tesla’s stock. He accused Mr. Musk, the world’s richest person, of “effectively quitting his job at Tesla” and “promoting policies” that have been harmful to Tesla’s business.

“As the market has learned the truth, bit by bit, that Musk has in fact abandoned Tesla in favor of DOGE, where he was taking actions that alienated Tesla’s consumer base and causing Tesla’s sales to severely decline, the share price has dropped in response,” Mr. Lander wrote in a letter to Muriel Goode-Trufant, the corporation counsel for New York City. The letter was seen as a likely precursor to a lawsuit because Ms. Goode-Trufant is the lawyer for the pension funds.

As a result, the letter said, the value of the pension system’s Tesla holdings has dropped by 34 percent from Dec. 31 to March 28, to $831 million from $1.26 billion.

Read more: https://www.nytimes.com/2025/04/01/us/nyc-pension-funds-elon-musk-doge.html

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No paywall (gift)

Link to NY Comptroller PRESS RELEASE - NYC Comptroller Brad Lander Moves to Pursue Securities Litigation Against Tesla Board of Directors

NOTE: From the Press Release -

The five NYC public pension systems hold over 3 million shares of Tesla. These shares were worth $1.26 billion on December 31, 2024, and shrunk to $831 million as of March 28. 2025.

You wanna get him? DIVEST.

[Old Testament Libera]

1. This is really great!

Musk is doing his shareholders a disservice by drawing fire and protest to Tesla, tanking their stock. He needs to go back to running his companies and get out of government. He does not understand government.

[madville]

2. This really only makes sense

If they bought all their shares in December around their peak, otherwise cherry-picking a specific date range on a particular stock doesn’t mean much. If they bought it all a year ago when the price was $160 a share they’d be up 60% right now for instance. I’d imagine they’ve been picking up shares over a broad date range and not just in the window they’re referencing. I’d be curious to see what their cost basis is. Tesla stock is historically volatile, it’s gone to absurd peaks and crashed multiple times in its history.

[DrFunkenstein]

3. Is Musk Fulfilling his Fiduciary Duties?

The fiduciary duty of an executive breaks down into several components:

The Duty of Loyalty: Every executive must remain loyal to the company, placing their company’s interests over their own.

The Duty of Good Faith: Every executive must do what they genuinely believe to be in the best interests of the company, and not act duplicitously or with ulterior motives.

The Duty of Care: Every executive must perform due diligence to ensure they are making well-informed decisions on behalf of their company.

The Duty to Disclose: When an executive’s fiduciary duty conflicts with other interests, such as their personal investments, they must disclose as such to the board of directors, and do whatever is necessary to cure that conflict.

https://www.bfclaws.com/business-law/what-is-an-executives-fiduciary-duty-to-their-company/#:~:text=The%20Duty%20of%20Good%20Faith,duplicitously%20or%20with%20ulterior%20motives.

[madville]

4. That's up to their board

Would have to vote him out. Has a single shareholder ever successfully sued a CEO for compensation or had them removed through the courts because of the stock price fluctuating? Can’t think of any.

[BumRushDaShow]

6. Yahoo! had a revolving door of them

For example - 2008: Yahoo CEO Jerry Yang to step down

(Carl Icahn was all involved and anytime he gets involved, look out!)

[vapor2]

7. There's a first time for everything (let's hope anyway)

[Prairie Gates]

5. He should absolutely be sued

He has violated his fiduciary duty and spiked the brand for a hobby and side project.

[CitizenZero]

8. Yet another reason

Yet another reason why business people should keep their noses out of government. Too many potential conflicts of interest, in both directions. Someone who is an active CEO really should not be in government. If they want to be in government, they should step down from their business position and put their business interests into a trust. Good luck getting anything like that from Musk. He has no concept of the law, democracy, or how government should operate. He is frankly an idiot, and if I was a stockholder in Tesla, I would want him out.