Settlement Overview

By Jonathan Stempel

(Reuters) – 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 insider 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, have denied wrongdoing in agreeing to settle.

TuSimple has paid $174 million of the settlement amount into an escrow account while its insurers have contributed $15 million.

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’ Claims

Shareholders allege that TuSimple misrepresented the safety of its technology prior to the IPO, which aimed to address obstacles on U.S. roads and to transfer improved technology to the Chinese rival, Hydron.

The truth reportedly emerged in August 2022, when the Wall Street Journal highlighted concerns about an Arizona freeway crash that indicated risks from TuSimple’s push to deliver driverless trucks.

Shareholders’ lawyers may seek up to 25% of the settlement amount, approximately $47 million, for legal expenses.

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

Case Information

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