A former Tesla Inc. (TSLA) employee and self-styled whistleblower has agreed to pay the electric auto maker $400,000 to settle the company’s lawsuit over claims that the former worker’s disclosures of confidential information caused its stock price to decline by $167 million.

As part of the settlement, the former employee also acknowledged that counterclaims raised in response to the lawsuit were funded by Tesla short seller Cable Car Capital LLC.

Tesla sued Martin Tripp, a former Nevada Gigafactory employee, in 2018, alleging he hacked a confidential manufacturing operating system, stole more than several gigabytes of data, and leaked trade secrets to a news reporter.

The company further alleged that Tripp lied to the media by asserting that punctured battery cells had been installed in certain Model 3 vehicles delivered to unsuspecting customers — a claim Tesla denies. Tesla also says Tripp exaggerated levels of scrap material used in its vehicle manufacturing process.

In addition to the larger settlement, Tripp has also agreed to pay Tesla $25,000 in sanctions based on Tripp’s violation of the Nevada district court’s protective order requiring him to refrain from disclosing information related to confidential documents. Tripp also agreed to destroy any documents he acquired through his work at Tesla.

‘One of those classic David versus Goliath situations’

Jacob Ma-Weaver, manager of multi-strategy fund Cable Car Capital, told Yahoo Finance he first became acquainted with Tripp after reading about the dispute in the media and seeing his GoFundMe page.

“I really believe firmly that all litigants deserve to compete on an equal playing field. And that's one of the unfortunate parts of our justice system — that really is not always the case. And this to me was one of those classic David versus Goliath situations,” Ma-Weaver told Yahoo Finance.

Ma-Weaver, a financial analyst, said his firm invests in litigation, occasionally, and generally where he has personal expertise and knowledge to bring to bear about the situation, and where there is a party who has financial constraints that prevent them from accessing the justice system.

“[Tripp] had the same right to defense and ability to prosecute counterclaims as anyone else,” Ma-Weaver said, adding that the relationship between Tripp and Cable Car Capital ended when Tripp violated the terms of the litigation funding agreement.

“I think it's very clear in a situation like this where you have a giant company suing an individual for everything he’s worth, and then some, even in the context of counterclaims, it can be quite difficult for them to obtain representation that’s on a purely contingency basis. And where I think litigation funding can often bridge the gap is in the situations where the risk profile to the attorneys of representing an indigent individual is too high. So funding, like any provision of capital, is a way to change the balance of risk sharing, so that it's not entirely on one party or another,” Ma-Weaver said. “If Tripp had had the resources himself to fund the case he never would have sought funding, full stop.”

A steep drop in stock price during ‘two short time windows’

In September, the court granted Tesla’s motion to do away with the counterclaims asserted by Tripp, alleging that the company’s CEO Elon Musk, and others at Tesla, defamed him and cast him in a false light in various emails and tweets.

Yahoo Finance has requested comment from Tesla, as well as from Tripp, and will update this story with responses it receives.

Tripp’s disclosures, Tesla argued, caused a $167 million drop in Tesla’s market capitalization during a two-day period in June 2018. In addition, the company said it incurred approximately $250,000 investigating the matter, and was owed $7,385 for wages that Tripp should not have been paid based on his alleged breach of loyalty. Tesla’s damages analyst theorized that the $167 million drop was connected to two articles written by Business Inisider’s Linette Lopez — one from June 4 calling Tesla’s production a “nightmare” and one from June 6 claiming its Gigafactory robots weren’t working yet.

“In the brief period of trading that took place between the publication of each of the June 4 Article and June 6 Article and the close of the NASDAQ trading day, Tesla’s market capitalization declined by $34 million and $134 million, respectively, or $167 million in total over those two short time windows,” the filing said.

In August 2019, Tripp’s then-lawyer, Robert Mitchell, told Yahoo Finance, “These are phantom damages in our view.”

In court filings, Tripp denied Tesla’s allegations. In July 2018, he filed an official tip with the U.S. Securities and Exchange Commission, which reiterated allegations he’d made to the media including a claim that Tesla lied to investors about its vehicle production numbers.

Tesla characterized Tripp as an underperforming former employee who became disgruntled after he was fired from the company.

Previous tweets published to Tripp’s Twitter account, allegedly showing images of punctured Tesla batteries, have been removed.

This story has been updated to include response from Cable Car Capital.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

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