A shareholder in Tesla Inc. has now claimed in a lawsuit that Elon Musk had inside knowledge of a production and delivery failure that Tesla Inc. was facing when he sold more than $7.5 billion in stock in 2022.
Tesla investor Michael Perry claimed in a lawsuit filed on Thursday in Delaware Chancery Court that Tesla’s chief executive officer had nonpublic information that Tesla would miss the fourth-quarter objectives that year when he sold the shares.
Perry stated in the complaint that Musk violated his fiduciary obligations to Tesla and its shareholders by utilizing that information to sell a portion of his Tesla stake in order to raise funds for his acquisition of X, a social media platform that was previously known as Twitter.
It is the most recent controversy regarding Musk’s stock purchases, sales, and statements.
The 52-year-old billionaire consented to participate in a third round of interrogation by the US Securities and Exchange Commission in its investigation into his acquisition of Twitter and whether he adequately disclosed his initial stake in the company. The lawsuit was filed the same week.
He was previously compelled to accept a “Twitter sitter,” a Tesla counsel, to monitor his communications regarding the company after a disagreement with the SEC over a Twitter post he made about taking Tesla private.
Perry also names Tesla directors as defendants in his lawsuit, alleging that they neglected to ensure that Musk fulfilled his legal obligations in the stock transactions and statements regarding the carmaker’s performance.
However, Perry asserts that Tesla’s objectives for the quarter were not met in November 2022, which was approximately halfway through the quarter.
Perry asserts that Musk executed the $7.53 billion share transfer prior to the public announcement of that development in January 2023.
According to the complaint, Tesla shares experienced a 12% decline from their close of $123.18 on Dec. 30, 2022, to $108.10 on Jan. 3, 2023, the first trading day following the Jan. 2 announcement of the figures.
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