A Tesla shareholder has filed a lawsuit accusing CEO Elon Musk of insider trading, alleging that he sold over $7.5 billion in shares of the electric car maker in late 2022 before the release of potentially disappointing production and delivery numbers. The lawsuit, filed by shareholder Michael Perry in Delaware Chancery Court, claims that Tesla’s stock price plummeted after the fourth-quarter numbers were made public on January 2, 2023, and that Musk “improperly benefited” by approximately $3 billion in insider profits.
According to the lawsuit, Musk sold the shares in November and December 2022 after learning of the lower-than-expected numbers in mid-November through his access to real-time data. Perry contends that Musk exploited his position and breached his fiduciary duties to Tesla, asking the court to direct Musk to return the profits. The lawsuit also accuses Tesla’s directors of failing in their fiduciary duty by allowing Musk to sell the shares. This lawsuit adds to Musk’s legal challenges, including a pending vote on his $56 billion pay package and a regulatory probe into potential violations of federal securities laws in his acquisition of Twitter stock.