Elon Musk made billions of dollars when he sold Tesla stock using insider information, an institutional shareholder accused in a lawsuit. The shareholder asked the court to direct the Tesla CEO to return “unlawful profits” in the lawsuit that comes two days before a critical vote by Tesla shareholders on whether to reinstate Elon Musk’s $56 billion pay package. A court had nullified the package in January saying that Elon Musk had improperly controlled the process of defining his salary.
The new lawsuit alleges that Elon Musk and his brother, Kimbal Musk, a Tesla director, sold a combined $30 billion in the company’s stock between late 2021 and the end of 2022. This happened just before the news that would cause the stock to fall became public, as per the lawsuit.
The billionaire sold the shares at artificially inflated prices by concealing his plan to use the proceeds to buy social media platform Twitter, now known as X, as per the lawsuit. Elon Musk also sold Tesla stock when he knew that deliveries of Tesla cars had fallen far below projections, lawsuit claimed.
A similar case was filed last month by Michael Perry, another Tesla shareholder, who also accused Elon Musk of insider trading when he sold over $7.5 billion of shares in Tesla in late 2022. The lawsuit also alleged that Elon Musk helped xAI, where he is CEO, to hire Tesla employees and divert artificial intelligence (AI) semiconductors which were bound for Tesla.
