(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, saying the billionaire entrepreneur had sold the shares ahead of potentially disappointing production and delivery figures. were made public.
Shareholder Michael Perry, in the lawsuit filed in Delaware Chancery Court, said Tesla’s stock price fell after the company’s fourth-quarter numbers were made public Jan. 2 2023, and claimed that Musk “improperly benefited” from about $3 billion in insider trading. profits.
“Musk exploited his position at Tesla and he breached his fiduciary duties to Tesla,” the lawsuit says, asking the court to order Musk to disgorge profits made from the transactions.
According to the lawsuit, Musk sold the shares on different dates in November 2022 and December 2022.
The lawsuit also accused Tesla directors of breaching their fiduciary duty by allowing Musk to sell the shares.
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 vehicles was “great” — discovered the lower-than-expected numbers in mid-November, thanks to his access to real-time data, and had sold its shares before the information was public.
Following the announcement of price cuts on vehicles that sparked concerns about demand and the release of the numbers in January, Tesla shares fell.
“If (Musk) had waited to make these sales after the publication of significant adverse news, … its sales would have earned it less than 55% of the amounts realized on its November and December 2022 sales,” the lawsuit states.
The lawsuit is the latest legal headache for Musk.
This comes as Musk faces opposition from some Tesla shareholders who are expected to vote June 13 on whether to ratify his $56 billion compensation package, which a Delaware judge struck down in January because She felt he was improperly controlling the process.
Tesla is incorporated in Delaware.
Musk is also in the midst of a regulatory investigation into whether he violated federal securities laws in 2022 when he purchased shares of the social media platform Twitter, which he later renamed X. Musk said the U.S. Securities and Exchange Commission was trying to “harass” him through unwarranted investigations.
Musk and America’s top markets regulator have feuded for years, dating back to 2018, when he tweeted that he had “secured funding” to take Tesla private.
Another shareholder lawsuit accused Musk of defrauding investors by delaying the disclosure of his stake in the social media company in order to accumulate shares at lower prices.
(Reporting by Abhirup Roy in San Francisco; Editing by Leslie Adler)
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