A Tesla investor, Michael Perry, has filed a lawsuit accusing Elon Musk of insider trading. Perry claims that Musk used confidential information about Tesla’s fourth-quarter expectations to sell $7.5 billion worth of Tesla stock before the results were made public. Perry alleges that Musk made these trades in November and December 2022, knowing that the stock’s value would drop significantly after the Q4 results were released. The lawsuit states that Musk’s insider profits from these sales would have been significantly lower if made after the public announcement.
The lawsuit also accuses Musk of misleading shareholders about Tesla’s performance in the fourth quarter during an earnings call in October 2022. This is not the first time Musk has faced insider trading accusations, as he was recently sued for manipulating the price of Dogecoin.
The lawsuit has attracted attention, with experts suggesting that similar cases are often settled rather than risk going to trial. Musk is also facing challenges regarding his $55 billion pay package and the possible relocation of Tesla’s incorporation from Delaware to Texas. Shareholders will vote on these matters on June 13.
Vocabulary List:
- Insider trading (noun): The illegal practice of trading on the stock exchange to one own advantage through having access to confidential information.
- Confidential (adjective): Secret or privateintended to be kept secret.
- Alleges (verb): Claim or assert that someone has done something illegal or wrongtypically without proof.
- Manipulating (verb): Controlling or influencing (a person or situation) cleverlyunfairlyor unscrupulously.
- Settled (verb): Resolving or reaching an agreement about (a dispute or argument).
- Relocation (noun): The action of moving to a new place and establishing one s home or business there.
