NYC Comptroller Urges Lawsuit Against Tesla Over Musk's Management Claims
New York City, Wednesday, 2 April 2025.
NYC Comptroller Brad Lander is advocating for legal action against Tesla, accusing the company of misleading investors about Elon Musk’s commitment, causing significant financial losses for pension funds.
Significant Financial Impact on NYC Pension Funds
The financial implications of this situation are substantial for New York City’s pension system, which manages $284.3 billion in total assets [1]. Tesla’s stock value has experienced a dramatic decline, falling from $1.26 billion on December 31, 2024, to $831 million as of March 28, 2025, representing a -34.048% decrease [2][3]. The five NYC pension funds collectively hold approximately 3 million Tesla shares [4].
Allegations of Misrepresentation
At the heart of the controversy is Musk’s role as head of the Department of Government Efficiency (DOGE) under the Trump administration, which Lander claims has significantly diverted his attention from Tesla [1][2]. The comptroller alleges that Tesla made ‘material misstatements’ by maintaining that Musk was spending significant time on company operations despite his governmental responsibilities [5]. Lander explicitly stated on April 1, 2025, that ‘Musk has effectively quit his job at Tesla’ in favor of his DOGE position [2].
Legal Strategy and Potential Remedies
The proposed legal action would take the form of a 10b-5 shareholder lawsuit, invoking protections under the Securities Exchange Act of 1934 [3]. The litigation aims to achieve two primary objectives: recovering financial losses and compelling governance changes, including the appointment of a full-time CEO [3]. This approach represents a preferred alternative to immediate divestment, as it could potentially address Tesla’s governance issues while recuperating some of the pension funds’ losses [4].
Broader Implications and International Response
The NYC Comptroller’s actions have emerged amid growing international scrutiny of Tesla’s governance. In March 2025, Denmark’s AkademikerPension announced plans to blacklist Tesla unless significant changes are approved at the upcoming June 2025 shareholder meeting [4]. This follows PensionDanmark’s earlier decision to exclude Tesla from its investments in 2023 due to labor disputes [4].