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Elon Musk is facing allegations of insider trading by Tesla shareholders in a lawsuit

One Tesla shareholder filed a lawsuit against CEO Elon Musk, claiming he committed insider trading by selling shares just before production dropped.

Michael Perry filed the lawsuit regarding Musk’s sale of his shares in November and December 2022. During that fourth quarter, Tesla delivered more than 405,000 cars, which represented 40% year-over-year growth, despite a dip in November.

However, Perry claims that Musk would have lost 45% of his stock value if he had sold after November’s production and delivery data became public. Share prices fell from November 4, when they were over $228 per share, to just over $113 in January next year, before rising again.

Perry filed his suit in the more than 220-year-old Court of Chancery in Delaware. On its website, it describes itself “as the country’s preeminent forum for the resolution of disputes over internal matters” of various companies across the country.

“The company’s unique competency and exposure to corporate law issues are unparalleled,” the website said.

This is the same court where a judge last month denied Musk’s $56 billion compensation package in a lawsuit against one of Tesla’s shareholders. Musk has since pushed the company to delist itself from Delware. Musk has already reincorporated his SpaceX company into Texas after originally incorporating it in Delaware.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINATOR

The Washington Examiner contacted Tesla for comment.

Musk sold these shares, which Perry said gave him about $3 billion in insider profits, amid his purchase of social media platform Twitter. He then sold more shares in April and August to pay for the $44 billion price tag.

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