Elon Musk Accused of Using Insider Info for Tesla Stock

todayJune 12, 2024 24

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Elon Musk, CEO of Tesla, is facing serious allegations from an institutional shareholder accusing him of using insider information to make billions by selling Tesla (TSLA.O) stock. The Employees’ Retirement System of Rhode Island (ERSRI) filed a lawsuit on Tuesday, claiming Musk and his brother, Kimbal Musk, made $30 billion from stock sales between late 2021 and the end of 2022. The suit requests the court to order Musk to return these “unlawful profits.”

The timing of the lawsuit is notable, coming just two days before a crucial vote by Tesla shareholders on whether to reinstate Musk’s $56 billion pay package. A Delaware judge had previously voided this package in January, citing Musk’s improper control over the process.

According to the lawsuit filed at the Delaware Chancery Court, Musk sold his shares at inflated prices by hiding his intention to use the proceeds to buy Twitter, which he has since renamed X. The lawsuit also claims Musk sold Tesla stock knowing the company’s car deliveries were significantly below public projections, actions that concealed negative information from the market.

Neither Musk nor Tesla has responded to requests for comment on these allegations.

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