Tesla limits investors' ability to sue over breach of fiduciary duties

In a regulatory filing out Friday, Elon Musk-led automaker Tesla announced a change to its corporate bylaws that will limit shareholders ability to sue the company if investors believe the company's board or executives committed any breach of fiduciary duties. The filing says the new bylaw went into effect as of May 15, and that Tesla has adopted "an ownership threshold requiring any shareholder or group of shareholders to hold shares of common stock sufficient to meet an ownership threshold of at least 3% of Tesla's issued and outstanding shares in order to institute or maintain a derivative proceeding." Tesla's current market cap stands over $1 trillion. A 3% stake of common stock and all outstanding shares would be worth more than 30 billion dollars. Tesla did not immediately respond to a request for comment on the change to its bylaws. According to Ann Lipton, an experienced corporate and securities law trial attorney who now teaches at Tulane Law School, the company is taking ... Read full article.