TuSimple reached a $189 million settlement of a lawsuit accusing the self-driving truck technology company of defrauding shareholders by overstating its safety record and concealing three insiders’ control of a Chinese trucking rival.
A preliminary settlement of the proposed class action was filed on Monday in the federal court in San Diego, where TuSimple is based, and requires a judge’s approval.
All defendants, including the company, various TuSimple founders and executives, and TuSimple’s bank underwriters, denied wrongdoing in agreeing to settle.
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TuSimple has paid $174 million of the settlement amount into an escrow account while its insurers have paid $15 million there, court papers show.
The company delisted from Nasdaq in January, fewer than three years after raising $1.35 billion in an April 2021 initial public offering.
Lawyers for TuSimple did not immediately respond to requests for comment on Tuesday.
Shareholders said TuSimple misrepresented the safety of its technology prior to the IPO, with an eye toward addressing the kinks on U.S. roads and transferring the improved technology to the Chinese rival, Hydron.
They said the truth emerged in August 2022, when the Wall Street Journal said an Arizona freeway crash four months earlier underscored analyst and employee concerns that TuSimple’s rush to deliver driverless trucks put public safety at risk.
Lawyers for the shareholders may seek up to 25% of the settlement amount, or about $47 million, for legal fees.
TuSimple went public at $40 per share. The shares traded unchanged at 20 cents in Tuesday afternoon over-the-counter trading on the Pink Sheets.
The case is Dicker et al v. TuSimple Holdings Inc et al, U.S. District Court, Southern District of California, No. 22-01300.
(Reporting by Jonathan Stempel in New York)
