New York City Comptroller Brad Lander, the investment adviser to the city’s five pension funds, accused Tesla Inc. of misrepresenting chief executive officer Elon Musk’s involvement in the company.
Lander said that Tesla made material misstatements to shareholders by maintaining Musk is spending significant time on the company despite his job as the head of President Donald Trump’s Department of Government Efficiency, the body charged with slashing federal spending.
Tesla stock has plunged since Musk has become the head of DOGE, hurting shareholders, Lander said. In less than three months, New York City’s $285 billion pensions have lost more than $300 million as Tesla stock has lost almost 40%, Lander said.
“Tesla shareholders don’t have a full time CEO paying attention to the company and their interests,” Lander said at a news conference on Tuesday. He is one of roughly a dozen Democrats running to be mayor of New York.
Tesla has drawn a flurry of shareholder lawsuits challenging everything from Musk’s pay package to diverting Tesla resources in his 2022 effort to acquire Twitter Inc. The company has also drawn lawsuits ranging from fatal crashes blamed on the company’s Autopilot system to allegations of racism against workers.
In a December 2024 US Securities and Exchange Commission filing, Tesla said it was “highly dependent on the services of Elon Musk” and that he spends “significant time with Tesla.”
Lander accused Musk of abandoning Tesla in favor of DOGE and alienating the company’s customers, causing severe declines in the car company’s sales.
Lander called on the New York City Law Department, which is authorized to be the legal representative for the pension funds, to back a shareholder lawsuit against Tesla.
“Given the New York City pension systems’ longstanding expression of concerns about corporate governance and the need for a full-time CEO, and Tesla’s misrepresentations regarding Musk’s role at DOGE, we are well-placed to commence and lead this potential litigation,” Lander wrote in a March 31 letter to Muriel Goode-Trufant, managing attorney for the city, according to a copy of the correspondence obtained through a public records request.
A spokesman for Mayor Eric Adams didn’t immediately respond to a request for comment. A spokesperson for Tesla didn’t immediately respond to a request for comment.
New York City’s pensions have previously led shareholder campaigns over governance reforms at Tesla. At the company’s 2024 annual meeting, the city pensions and seven other investors urged shareholders to reject Musk’s $47 billion compensation package and vote against the reelection of Musk’s brother Kimbal and James Murdoch, Rupert Murdoch’s son, to Tesla’s board.
“Even as Tesla’s performance is floundering, the board has yet to ensure that Tesla has a full-time CEO who is adequately focused on the long-term sustainable success of our company,” Lander wrote in an SEC filing.
If the city’s Law Department pursues litigation against Tesla’s board, the pension funds can seek financial damages to cover losses and as well as governance changes. These outcomes would be preferable to divestment, which would lock in losses, Lander said.
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