A federal appeals court is reviewing a San Francisco judge’s order approving the lead plaintiff in consolidated class actions brought by shareholders over Tesla Inc. CEO Elon Musk’s posts on Twitter last year.
The U.S. Court of Appeals for the Ninth Circuit ordered the lead plaintiff to respond by April 5 to an interlocutory appeal made by a competing institutional investor who claimed $3.8 million in losses due to Musk’s alleged fraud. That investor, Bridgestone Investment Corp., argued that U.S. District Judge Edward Chen failed to comply with the Private Securities Litigation Reform Act when he selected a shareholder that could represent a diverse class of both stock purchasers and short sellers, rather than the one with the largest losses.
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