Self-driving truck company TuSimple settles fraud lawsuit for $189 million, by Reuters

By Jonathan Stempel

(Reuters) – TuSimple has reached a $189 million settlement of a lawsuit accusing the self-driving truck technology company of defrauding shareholders by exaggerating its safety record and hiding three insiders’ control of a Chinese rival of transport.

A preliminary settlement of the proposed class action was filed Monday in federal court in San Diego, where TuSimple is based, and requires a judge’s approval.

All defendants, including the company, various founders and directors of TuSimple, and TuSimple’s bank underwriters, have denied wrongdoing in which they have agreed to settle.

TuSimple paid $174 million of the settlement into an escrow account, while its insurers paid $15 million there, court documents show.

The company delisted from the Nasdaq in January, less than three years after raising $1.35 billion in an April 2021 initial public offering.

Attorneys for TuSimple did not immediately respond to requests for comment Tuesday.

Shareholders said TuSimple misrepresented the safety of its technology before the IPO, with an eye toward solving problems on US roads and transferring improved technology to Chinese rival Hydron.

They said the truth came out in August 2022, when the Wall Street Journal said a crash on an Arizona highway four months earlier underscored concerns among analysts and employees that TuSimple’s rush to deliver driverless trucks was putting public safety hazard.

Attorneys for the shareholders can seek up to 25 percent of the settlement, or about $47 million, in legal fees.

TuSimple went public at $40 per share. Shares traded flat at 20 cents in over-the-counter trading Tuesday afternoon on the Pink Sheets.

The case is Dicker et al v. TuSimple Holdings Inc et al, US District Court, Southern District of California, No. 22-01300.