TuSimple has agreed to a $189 million settlement to resolve a fraud lawsuit alleging that the self-driving truck company deceived shareholders by exaggerating its safety record and hiding the involvement of three insiders with a Chinese trucking competitor.
The preliminary settlement, filed on Monday in federal court in San Diego, requires judicial approval. The settlement involves TuSimple, its founders and executives, and its bank underwriters, all of whom have denied any wrongdoing.
To date, TuSimple has deposited $174 million of the settlement into an escrow account, with the remaining $15 million covered by its insurers, according to court documents.
TuSimple, which went public in April 2021 raising $1.35 billion, delisted from Nasdaq in January, just under three years later.
Shareholders claimed that TuSimple misrepresented the safety of its technology before the IPO, intending to fix issues in the U.S. before transferring technology to its Chinese rival, Hydron. The allegations came to light in August 2022 when the Wall Street Journal reported that an Arizona freeway crash earlier that year highlighted safety concerns about TuSimple’s rush to deploy driverless trucks.
Legal representatives for the shareholders may request up to 25% of the settlement amount, approximately $47 million, for legal fees.
TuSimple’s stock, which was initially priced at $40 per share during its IPO, remained unchanged at 20 cents in over-the-counter trading on Tuesday.
The case is titled Dicker et al v. TuSimple Holdings Inc et al, U.S. District Court, Southern District of California, No. 22-01300.
