The office of the New York City comptroller, which oversees five public pension systems, is recommending the New York City Law Department seeks securities litigation against electric car maker Tesla Inc. over “enormous losses” to shareholders.

In a statement on the office’s website, Brad Lander, the New York City comptroller, said Tesla made material misstatements about the active management time spent overseeing the firm by chief executive officer Elon Musk.

“In less than three months, Tesla stock has lost nearly 40 per cent of its value, with losses over US$300 million for the New York City pension systems.”

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Musk became a special advisor for U.S. President Donald Trump since the start of the year and officially oversees the administration’s Department of Government Efficiency, which aims to cutting funding across government agencies.

Lander said Musk’s time spent in Trump’s inner circle is costing Tesla’s business and its shareholders. “We have long expressed concerns that the Tesla board has failed to provide independent oversight, or to require that Musk – or someone else – serve as a full-time CEO.”

In an emailed statement to Benefits Canada, a spokesperson for Lander said the office has received a letter from Randi Weingarten, president at the American Federation of Teachers, with support of the campaign against management practices at Tesla.

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Lander said the board at Tesla has failed shareholders by not incorporating independent oversight or enforcing its own governance rules against the use of company shares as loan collateral.

“These management and governance failures have caused Tesla stock to plummet. I stand with President Weingarten in demanding full transparency from Tesla about these loans and will continue fighting to hold the company accountable to protect investors.”

At the start of the year, shares in the firm on the open market were worth more than US$400 but as at Friday, April 4, the company was priced at just under $240 per share.

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