A Tesla shareholder filed a lawsuit on Thursday accusing CEO Elon Musk of insider trading when he sold over $7.5 billion of shares of the electric car maker in late 2022, saying the billionaire entrepreneur sold the shares before potentially disappointing production and delivery numbers were made public.
FILE PHOTO: Elon Musk, CEO of SpaceX and Tesla and owner of X, formerly known as Twitter, gestures as he attends the Viva Technology conference on innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16, 2023. REUTERS/Gonzalo Fuentes/File Photo
"Musk exploited his position at Tesla, and he breached his fiduciary duties to Tesla," the lawsuit said, asking the court to direct Musk to return the profits made from the trades.The lawsuit also accused Tesla's directors of breaching their fiduciary duty by allowing Musk to sell the shares.
"Had waited to make these sales until after the release of material adverse news,... his sales would have netted him less than 55 per cent of the amounts realized from his November and December 2022 sales," the lawsuit said.It comes as Musk faces opposition from some Tesla shareholders who are set to vote on June 13 on whether to ratify his $56 billion pay package, which a Delaware judge voided in January because she found he improperly controlled the process.
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