JPMorgan ended legal battle with Tesla over Musk’s 2018 tweet By Investing.com

According to a report by Bloomberg News, JPMorgan Chase & Co (NYSE:). and Tesla (NASDAQ:) Inc. settled their litigation and agreed to drop their respective claims.

The conflict, which originated in a 2014 stock option agreement, began with a lawsuit filed by JPMorgan in 2021 and was related to a controversial tweet from Tesla CEO Elon Musk.

JPMorgan is demanding $162 million from Tesla, citing contract terms that were intended to provide the electric car maker with protection from share dilution through convertible bonds and secure certain tax benefits.

The situation worsened when Musk tweeted in August 2018 that he was considering delisting Tesla at $420 per share, claiming that “funding was secured.”

In response to this tweet and the resulting market volatility, JPMorgan is announcing the exercise price of the warrants. The bank argued that this was justified by the terms of the contract.

Tesla countered with the accusation that JPMorgan had taken advantage of the situation to unjustifiably lower the exercise price. This constitutes a breach of contract and an attempt to gain an unauthorized financial advantage.

The decision to settle the dispute was announced in a brief court document on Friday. The details of a possible out-of-court settlement were not disclosed in the filing.

The settlement of the dispute follows a September decision by U.S. District Judge Paul Gardephe. The judge for the Southern District of New York had rejected JPMorgan’s request for early judgment in its favor, which had dismissed Tesla’s counterclaims.

Neither Tesla and JPMorgan representatives nor their legal counsel have yet commented on this latest development. The case, officially listed as JPMorgan Chase Bank v. Tesla Inc., was heard in the U.S. District Court for the Southern District of New York.

This litigation highlights the complex relationships between major banks and innovative technology companies, as well as the potential legal consequences of social media statements made by company leaders. Resolving the dispute could allow both companies to refocus on their core business without further legal distractions.

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