Tesla CEO Elon Musk Faces Lawsuit Over Alleged $7.5 Billion Insider Trading

Tesla CEO Elon Musk Accused of $7.5 Billion Insider Trading in Investor Lawsuit

Tesla CEO Elon Musk is facing a shareholder lawsuit alleging he engaged in $7.5 billion worth of insider trading. The lawsuit, filed by Tesla investor Michael Perry in Delaware Chancery Court, claims that Musk had inside knowledge of Tesla’s impending miss on production and delivery numbers for the fourth quarter of 2022 when he sold over $7.5 billion in company stock.

Perry’s complaint asserts that Musk exploited his position at Tesla and breached his fiduciary duties to the company and its shareholders. According to the lawsuit, Musk sold these shares to finance his acquisition of the social media platform X, formerly known as Twitter.

The lawsuit further alleges that Musk profited from his misconduct and exploitation of material nonpublic information. Perry has asked the court to order Musk to return the profits from the alleged improper trading to Tesla.

Additionally, the lawsuit accuses Tesla’s directors of failing to ensure that Musk complied with legal obligations regarding stock sales and statements about the company’s financial performance. Perry’s suit references Musk’s optimistic public statements earlier in 2022, where he claimed the company had “excellent demand” and anticipated selling every car it could produce. However, by November 2022, Musk allegedly knew that Tesla would not meet its fourth-quarter targets and sold shares worth $7.53 billion before this information was made public.

This legal challenge comes amid ongoing scrutiny of Musk’s stock transactions and public remarks. Earlier this week, Musk agreed to a third round of questioning by the U.S. Securities and Exchange Commission (SEC) as part of its investigation into his acquisition of Twitter and whether he properly disclosed his initial stake in the company.

Sources By Agencies

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