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Tesla is being sued by the parents of a another victim killed in a Cybertruck crash in the quiet town of Piedmont, California. This is the second suit filed against the car maker this week alleging a design flaw in its vehicle is to blame for the deaths of the passengers involved in the accident, according to court filings.

The parents of Jack Nelson allege that the company that helped Elon Musk become the world’s richest man knew about the flaw for years and could have moved faster to fix the problem but did not, leaving the passengers trapped amid flames and smoke that eventually killed them.

“This case arises from catastrophic design defects in the Tesla Cybertruck that turned a survivable crash into a fatal fire,” reads the complaint, which was filed on Thursday in Alameda county superior court. The Nelsons are being represented by the firm Walkup, Melodia, Kelly & Schoenberger.

Tesla did not reply to a request for comment.

A similar suit was filed against Tesla on Thursday by the parents of Krysta Tsukahara, another victim of the crash. Tsukahara, 19, and Nelson, 20, were traveling in the back of the Cybertruck on 27 November 2024, with one other passenger and the driver. The car smashed into a tree at high speed and caught on fire, according to a California highway patrol report.

When power to the truck’s electric doors was shuttered by the fire, the passengers were locked inside with no way out. The driver also died. The fourth passenger was pulled from the car after a rescuer broke a window.

“The four young people in the Cybertruck were close friends and outstanding individuals, each on the verge of making meaningful contributions to the world,” Todd and Stannye Nelson, Jack’s parents, said in a statement. “They were all victims of Tesla’s unsafe design. Their deaths and injuries have devastated everyone who knew them.”

The new legal threats to Tesla come just weeks after the National Highway Traffic Safety Administration opened an investigation into the car maker about its electric door handles, which are built to be flush with the body of the vehicle.

The agency is also looking into complaints by drivers that said after exiting their cars, they could not open back doors to get their children out and, in some cases, had to break the window to reach them.

Tesla door handles have been at the center of several other crash lawsuits because the battery powering the unlocking mechanism can be destroyed in a fire and the manual releases that override that system are difficult to find.

“The backup mechanical release for that door was concealed beneath the liner of the map pocket at the bottom of the door – hidden, unlabeled, and impractical to locate or use in the smoke and chaos of a post-crash fire,” said the Nelsons. “As a result, the Cybertruck’s design left Jack and the other occupants with no practical way to escape.”

The Cybertruck lawsuits follow several others that have claimed various safety problems with Tesla cars. In August, a Florida jury decided that Tesla must pay $243m in damages to the family of a 22-year-old woman who was killed by one of its vehicles operating in Autopilot mode.

Summary

This paper analyzes the rapid growth and evolving landscape of synthetic risk transfers (SRTs), a securitization tool increasingly used by banks to manage credit risk and optimize capital. Since 2016, over $1 trillion in assets have been synthetically securitized, with recent expansion driven by U.S. banks alongside established European issuers. SRTs enable banks to transfer credit risk on diverse loan pools to investors, facilitating capital relief and supporting additional lending. The paper reviews market trends, common SRT structures, and regulatory frameworks across major jurisdictions. We find that SRTs offer benefits such as enhanced risk management and capital efficiency, and that strengthened prudential requirements and a relatively small SRT market have, for now, contained financial stability risks. However, the rapid growth of SRTs and certain transaction complexities can increase vulnerabilities, including higher leverage in the financial system and exposure to rollover risks. The entry of risk-tolerant investors seeking compelling returns may also weaken credit standards or increase leverage. The paper highlights the importance of close supervisory monitoring, robust reporting, and disclosure to ensure risks are effectively transferred, financial system leverage is contained, and market discipline is maintained as the SRT market continues to expand.

Subject:

Credit,
Credit risk,
Financial institutions,
Financial regulation and supervision,
Financial services,
Hedge funds,
Loans,
Money,
Securitization

Keywords:

Banks,
Credit,
Credit risk,
Europe,
Global,
Hedge funds,
Loans,
North America,
Regulation,
Risk,
Securitization,
Securitization,
Stability