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A Tesla shareholder has filed a lawsuit against Elon Musk, accusing him of insider trading in connection with production shortfalls.




Tesla CEO Elon Musk is embroiled in a new legal dispute, with Tesla shareholder Michael Perry filing a lawsuit accusing him of insider trading. The lawsuit, lodged in Delaware Chancery Court, claims Musk sold over $7.5 billion worth of Tesla stock in late 2022 while privy to non-public information about potentially disappointing production and delivery figures.

Perry alleges Musk “improperly benefited” from insider knowledge, making around $3 billion in profits when Tesla's stock price fell following the disclosure of fourth-quarter results on January 2, 2023. The lawsuit highlights Musk's previous 2022 statements about excellent demand for Tesla vehicles, which contrasted with the company’s subsequent production struggles.

The suit asserts that Musk, who has access to real-time Tesla data, was aware of the lower-than-expected production numbers by mid-November and timed his share sales before this information became public. The stock value dropped significantly after Tesla announced price cuts to boost demand and revealed the disappointing figures.

Perry contends that had Musk waited to sell his shares until after this information was released, his profits would have been less than half of what he earned by selling in November and December 2022. The lawsuit seeks to have Musk return the profits from these trades and accuses Tesla's board of directors of neglecting their fiduciary duties by permitting the sales.

This lawsuit adds to Musk's ongoing legal challenges, including opposition from some Tesla shareholders regarding his $56 billion pay package, which faces a vote on June 13. This follows a Delaware judge’s January decision to void the package, citing Musk's undue influence over the process. Neither Musk nor Tesla has commented publicly on the lawsuit.


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