Elon Musk
Delaware/IBNS: Tesla CEO Elon Musk has landed in yet another controversy as he has been named in a shareholder lawsuit for allegedly being involved in $7.5 billion insider trades at the electric car manufacturer, reports said.
According to reports, Tesla investor Michael Perry on Thursday (May 30) filed a suit in Delaware Chancery Court where he claimed that Elon Musk had inside knowledge of a miss on production and delivery numbers that Tesla Inc. was facing when he sold more than $7.5 billion in stock in 2022.
The Tesla shareholder alleged in his lawsuit that Musk had nonpublic information that Tesla would miss its fourth quarter targets in 2022 and sold his shares.
Elon Musk “exploited his position at Tesla, and he breached his fiduciary duties” to the company and its shareholders, Michael Perry mentioned in his lawsuit, adding that the Tesla CEO sold those company shares to complete his buyout of social media platform X (formerly Twitter).
Perry alleged in his lawsuit that “Musk profited from his misconduct and his exploitation of material and adverse inside information.”
The Tesla shareholder further asked the judge to order Musk to return the profit from his alleged improper trading back to the company.
Perry, in his lawsuit, also accused the Tesla directors of failing to make sure that Musk complied with the legal obligations in stock sales and statements about the electric car company's financial performance.
According to the suit, the Tesla CEO touted the quarterly performance earlier in 2022, saying the company enjoyed “excellent demand” and expected “to sell every car we make as far into the future as we can see.”
Elon Musk, however, learned in November, 2022 that the company will not meet its targets for the fourth quarter, and before the development was officially announced, the Tesla CEO dumped shares worth $7.53 billion, as mentioned in the suit.
The lawsuit comes in the same week Musk agreed to sit for a third round of questioning by the US Securities and Exchange Commission in its probe of his Twitter acquisition and whether he properly disclosed his initial stake in the company, according to reports.
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