A Tesla shareholder filed a lawsuit Thursday accusing CEO Elon Musk of insider trading when he sold more than $7.5 billion of shares in the electric car maker by the end of 2022, saying the billionaire entrepreneur sold the stock before potentially disappointing production and delivery numbers were released.
Shareholder Michael Perry, in the lawsuit filed in Delaware Court of Chancery, said Tesla's stock price plummeted after the company's fourth-quarter numbers were released on Jan. 2, 2023. , and claimed that Musk “improperly benefited” from about $3 billion in insider information. benefits.
“Musk exploited his position in Tesla and breached his fiduciary duties to Tesla,” the suit said, asking the court to order Musk to return any profits made from the transactions.
According to the lawsuit, Musk sold the shares on several dates in November 2022 and December 2022.
The lawsuit also accused Tesla directors of breaching their fiduciary duty by allowing Musk to sell the stock.
Musk and Tesla did not immediately respond to a Reuters request for comment.
In the lawsuit, Perry said Musk — who in 2022 said demand for Tesla's vehicles was “excellent” — learned of the lower-than-expected numbers in mid-November, with his access to real-time data, and sold his shares before the information was public.
After news of vehicle price discounts fueled concerns about demand and the release of numbers in January, Tesla shares fell.
“If (Musk) had waited to make these sales until after the release of material adverse news, … his sales would have netted him less than 55% of the amounts realized with his November and December 2022 sales,” the lawsuit said.
The lawsuit is the latest legal headache for Musk.
It comes as Musk faces opposition from some Tesla shareholders who will vote June 13 on ratifying his $56 billion pay package, which a Delaware judge struck down in January because it found that it incorrectly controlled the process.
Tesla is incorporated in Delaware.
Musk is also in the middle of a regulatory investigation into whether he violated federal securities laws in 2022 when he bought shares in the social media platform Twitter, which it later renamed X. Musk said the Securities and Exchange Commission of the United States was trying to “harass” him through unwarranted investigations.
Musk and the top U.S. markets regulator have been at loggerheads for years, dating back to 2018, when he tweeted that he had “funding secured” to take Tesla private.
A shareholder lawsuit has accused Musk of defrauding X investors by delaying disclosure of his stake in the social media company in order to stockpile shares at lower prices.
© Thomson Reuters 2024
