• Tesla investor accuses Elon Musk, the CEO of Tesla, of $7.5 billion of inside trading in November and December 2022.
  • Musk allegedly profited about $3 billion from the sales, according to the lawsuit and would earn less than 55% of it if he waited to make the selloff after the public announcement of the delivery miss.
  • Michael Perry, who filed the lawsuit, has asked a judge for Musk to return the profit he made from the alleged insider trading.

Elon Musk, the world’s wealthiest man, has been accused of selling over $7.5 billion worth of Tesla stock in late 2022, according to a lawsuit filed by a Tesla shareholder Thursday. The shareholder also accused Musk of exploiting his position and breaching fiduciary duties.

The alleged insider trading

Elon Musk was sued for selling approximately $7,530,113,926 of company stock in 2022 with non-public information about Tesla falling short on fourth-quarter deliveries and production. If Musk waited to make the selloff after the public announcement of the delivery miss, the sales would have netted him less than 55% of what he actually realised, the lawsuit said.

Also read: Musk faces lawsuit over delayed disclosure of Twitter stake

Also read: CalPERS CEO opposes Musk’s $56B pay package at Tesla

Key background

In 2022, Musk sold 19.5 million Tesla shares worth about $3.95 billion shortly after his $44 billion purchase of Twitter. The tech billionaire sold a total of about $22.9 billion worth of shares later that year, according to CNBC, which cited financial research firm VerityData.

In 2023, he followed up with another large selloff in December, selling around $3.6 billion worth of his company’s stock. A federal investigation into his purchase of Twitter is in full swing, with Musk agreeing this week to testify in the Securities and Exchange Commission’s probe into the $44 billion acquisition. Musk was sued by regulators last year for allegedly refusing to testify about the purchase.

Audrey Huang is an intern news reporter at Blue Tech Wave. She is interested in AI and startup stories. Send tips to a.huang@btw.media.

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