WILMINGTON, Del. (Reuters) – Elon Musk made billions of dollars by selling Tesla Inc (NASDAQ:) shares using inside information, an institutional shareholder charged in a lawsuit filed on Tuesday is asking a court to direct the Tesla CEO to return “unlawful profits.” Legal”. “
The lawsuit comes two days before a crucial vote by Tesla shareholders on whether to return Musk's $56 billion pay package, after a Delaware judge invalidated it in January because she found Musk had improperly controlled the process.
Musk and his brother, Tesla CEO Kimbal Musk, sold a total of $30 billion in shares of the electric car maker between late 2021 and the end of 2022, and profited before news that could cause the stock to decline became public, according to the lawsuit. , which is provided by the Employees' Retirement System of Rhode Island (ERSRI).
Musk sold the shares at artificially inflated prices by concealing his plan to use the proceeds to buy the social media platform Twitter, which he later renamed as X, according to the lawsuit filed in Delaware Chancery Court. Musk also sold Tesla shares when he learned that Tesla vehicle deliveries fell far below public expectations, the lawsuit said.
Musk and Tesla did not respond to messages seeking comment.
The Rhode Island Employees Retirement System owns about 140,000 shares of Tesla stock. Tesla stock closed at $170.66 on Tuesday, valuing the stake at about $24 million.
A similar lawsuit filed by Michael Burry, another Tesla shareholder, in the same court late last month accused Musk of insider trading when he sold more than $7.5 billion worth of shares in Tesla in late 2022.
Musk is conducting a regulatory investigation to determine whether he violated federal securities laws in 2022 when he bought Twitter shares.
The lawsuit filed by ERSRI on Tuesday also said Musk was disloyal toward Tesla in several instances, including shifting Tesla employees to work at X and causing Tesla to start paying for ads on Twitter after he bought the platform.
The fund's general treasurer said in a statement that ERSRI was concerned that Tesla's board was not doing enough to oversee Musk's conflicts of interest.
