Tesla shareholder sues Musk for alleged US$7.5b insider trading

SAN FRANCISCO (June 1): A Tesla shareholder filed a lawsuit on Thursday accusing chief executive officer Elon Musk of insider trading when he sold over US$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.

Shareholder Michael Perry, in the lawsuit filed in Delaware Chancery Court, said that Tesla's share price plummeted after the company's fourth-quarter numbers were made public on Jan 2, 2023, and claimed that Musk "improperly benefited" by about US$3 billion in insider profits.

"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.