(Reuters) – A Tesla shareholder filed a lawsuit on Thursday accusing CEO Elon Musk of insider trading when he sold more than $7.5 billion worth of the electric car maker’s stock in late 2022. He said the billionaire entrepreneur sold the shares ahead of a possible downturn in production and delivery figures. were made public.
Shareholder Michael Perry said in the lawsuit filed in Delaware Chancery Court that Tesla’s stock price plummeted after the company’s fourth-quarter earnings were released on Jan. 2, 2023, claiming Musk “unfairly benefited” from about $ 3 billion to insider. gain.
“Musk exploited his position at Tesla and breached his fiduciary duties to Tesla,” the lawsuit said, asking the court to order Musk to return profits from the transactions.
Musk sold the shares on separate dates in November 2022 and December 2022, according to the lawsuit.
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 said in 2022 that demand for Tesla’s vehicles was “excellent” — knew about the lower-than-expected numbers in mid-November, with his access to real-time data, and sold his shares before the election sold. information was public.
After news of car price cuts sparking demand concerns and the January earnings release, Tesla shares fell.
“If Musk had waited to make these sales until after the release of material adverse news,… his sales would have earned him less than 55% of the amounts realized from his sales in November and December 2022,” 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 on June 13 on whether to ratify his $56 billion pay package, which a Delaware judge overturned in January because she found he was ignoring the process inappropriately controlled.
Tesla is based in Delaware.
Musk is also in the middle of a regulatory investigation to determine whether he violated federal securities laws in 2022 when he bought shares on the social media platform Twitter, which he later renamed ‘. him through unwarranted investigations.
Musk and the top regulator of US markets have been embroiled in a yearslong feud, dating back to 2018, when he tweeted that he had “secured funding” to take Tesla private.
A separate shareholder lawsuit has accused Musk of defrauding X investors by delaying disclosure of his stake in the social media company to amass shares at lower prices.
(Reporting by Abhirup Roy in San Francisco; Editing by Leslie Adler)
