A Tesla shareholder recently filed a lawsuit against CEO Elon Musk, accusing him of insider trading in connection with the sale of over $7.5 billion in Tesla stock in late 2022. The shareholder, Perry, alleges that Musk made around $3 billion in profits based on insider information. Although Musk publicly stated that demand for Tesla’s electric vehicles was “excellent,” Perry claims that Musk had access to delivery numbers for the quarter and noticed that they were lower than expected. Perry’s lawsuit suggests that Musk may have sold shares while potential investors could have been driving up the stock price based on anticipated positive news.
The lawsuit comes at a crucial time for Tesla as the company prepares for a Shareholder Meeting, which could have significant implications. Additionally, there is ongoing discussion about approving Elon Musk’s $56 billion pay package. Notably, the lawsuit was filed in the Delaware Chancery Court, the same court where the decision regarding Musk’s pay package will be made. The company is also facing a vote on whether to remain incorporated in Delaware or move to Texas, with many advocating for the latter.
In the past, Elon Musk has had run-ins with regulatory authorities over his posts on social media platforms and potential stock violations. The SEC previously required him to step down as Tesla’s chairman and subjected his posts on Twitter to monitoring and approval.