WILMINGTON, Delaware (Reuters) – Elon Musk made billions of dollars by selling Tesla (NASDAQ:) shares using inside information, an institutional shareholder is accused of in a lawsuit filed on Tuesday asking the court to order the Tesla CEO to return the “illegal profits.” “
The lawsuit comes two days before a critical Tesla shareholder vote on whether to restore Musk’s $56 billion pay package after a Delaware judge tossed it out in January because she found Musk had improperly supervised the process.
According to the lawsuit, Musk and his brother Kimbal Musk, a Tesla director, sold a total of $30 billion in shares of the electric car maker between the end of 2021 and the end of 2022, making a profit before news that could cause shares to fall. public knowledge, the lawsuit says. , which was filed by the Employees’ Retirement System of Rhode Island (ERSRI).
Musk sold shares at artificially inflated prices to hide his plan to use the proceeds to buy the social media platform Twitter, which he later renamed X, according to a lawsuit filed in Delaware Chancery Court. Musk also sold Tesla stock when he learned that Tesla vehicle deliveries had fallen far below public forecasts, the lawsuit says.
Musk and Tesla did not respond to messages seeking comment.
The Rhode Island State Retirement System owns about 140,000 Tesla shares. Tesla shares closed at $170.66 on Tuesday, valuing the stake at about $24 million.
A similar lawsuit filed in the same court late last month by Michael Perry, another Tesla shareholder, accused Musk of insider trading when he sold more than $7.5 billion worth of Tesla shares at the end of 2022.
Musk is facing a regulatory investigation to determine whether he violated federal securities laws in 2022 when he bought Twitter shares.
The lawsuit, filed Tuesday by ERSRI, also alleges that Musk was disloyal to Tesla on several occasions, including reassigning Tesla employees to work at X and forcing Tesla to start paying for advertising on Twitter after he bought the platform.
ERSRI is concerned that Tesla’s board of directors is not taking sufficient steps to control Musk’s conflicts of interest, the fund’s general treasurer said in a statement.