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Elon Musk Attacked in $7.5 Billion Lawsuit Over Sale of Tesla Shares

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Elon Musk Sued Again

A Tesla shareholder filed a complaint in Delaware Chancery Court on Thursday accusing Tesla CEO Elon Musk of insider trading.

According to shareholder Michael Perry’s petition, Musk sold over $7.5 billion in shares of his electric car company in late 2022, before possibly poor production and delivery figures were released.

Perry stated Tesla’s shares plummeted after the company’s fourth-quarter results were released on Jan. 2, 2023, and that Musk “improperly benefited” from approximately $3 billion in insider profits.

“Musk exploited his position at Tesla, and he breached his fiduciary duties to Tesla,” according to the lawsuit. Perry seeks the court to order Musk to repay the gains from the deals.

According to the lawsuit, Musk sold the shares on several dates between November and December 2022. Perry also accused Tesla’s board of violating their fiduciary duties by enabling Musk to sell the stock.

The lawsuit claims that Elon Musk, who stated in 2022 that demand for Tesla vehicles was “excellent,” learned of the low production and delivery numbers in mid-November through his access to real-time data and sold his shares before the information became public.

Tesla compensation plan

When Tesla stated it would cut vehicle costs and revealed the data in January, analysts expressed concern that the company’s cars were not in high demand, and Tesla’s stock price fell.

“Had (Musk) waited to make these sales until after the release of material adverse news … his sales would have netted him less than 55% of the amounts realized from his November and December 2022 sales,” the complaint stated.

The action comes as Musk urges Tesla shareholders to vote to reinstate his $56 billion pay plan, which was thrown down by a Delaware judge in January.

The judge determined that Tesla’s board of directors failed to sufficiently disclose their personal relationships to Musk, and that the business was on track to meet the majority of the plan’s criteria.

Because of the absence of disclosures to shareholders, the judge ruled that the compensation plan was too large.

Musk replied to the verdict by urging Tesla to change its place of incorporation from Delaware to Texas, which is another item on the agenda for shareholders to vote on during the annual meeting.

Musk also faces an SEC investigation regarding his 2022 acquisition of Twitter, which he rebranded as X. Musk has claimed that the SEC is attempting to “harass” him with unfair probes.

Elon Musk attacks

A separate shareholder action accuses Musk of deceiving X investors by delaying disclosure of his ownership in the social media business in order to buy more shares at a reduced price.

Since Musk announced his ambition to buy Twitter, he has received a bombardment of significant criticism.

It’s safe to argue that up to his purchase of Twitter, he could do “no wrong” in the eyes of the left, except for the fact that all of his business ideas were long-term lucrative.

This meant that his goal was always to be successful, which some progressives saw as a disadvantage but were willing to overlook because Musk’s firms, in their opinion, did good for humanity generally.

What altered everything was Musk’s acquisition of Twitter, when he quickly began to transform the company into a successful one by cutting off the majority of its non-productive personnel.

He then expanded Twitter “X” to be a market place for all views rather than just those that liberals agreed with, with more conservative ideas silenced.

Musk went beyond the accepted boundaries that the left has set for us all. He interacts with people across the political spectrum, which is undesirable to the progressive movement.

Source: Reuters, Fox

 

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