--- title: "Elon Musk Accused of Massive Insider Trading at Tesla" description: "A Tesla investor is accusing Elon Musk of selling $7.5 billion worth of Tesla shares despite knowing of bad news ahead." date: "2024-06-04" modified: "2024-06-04" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/the-byte/elon-musk-accused-massive-insider-trading-tesla" categories: - "Advanced Transport" - "Elon Musk" - "Future Society" - "Tesla" - "The Industrialists" tags: - "elon musk" - "tesla" - "the digest" --- # Elon Musk Accused of Massive Insider Trading at Tesla ![A Tesla investor is accusing Elon Musk of selling $7.5 billion worth of Tesla shares despite knowing of bad news ahead.]() *\Image: Apu Gomes/Getty Images\* ## Tesla Cabal A Tesla investor is suing CEO Elon Musk over allegedly massive insider trading, accusing him of selling $7.5 billion worth of Tesla shares in late 2022 while knowing that the EV maker wouldn't be able to meet expectations by the end of the year. "By disposing of $7,530,113,926 worth of Tesla stock in November and December 2022 while he was in possession of adverse, material non-public information, E. Musk exploited his position at Tesla, and he breached his fiduciary duties to Tesla," reads the lawsuit, filed by shareholder Michael Perry. In early January 2023, Tesla shares plummeted to a two-year low following disappointing sales — despite Musk promising an "epic end of year" and allegedly knowing as early as November that the carmaker wouldn't meet targets. As such, Perry is calling for an estimated $3 billion to be returned to Tesla and seeking damages from the company's directors for their "reckless disregard." The lawsuit highlights the growing rift between shareholders and the company's leadership. The relationship is already strained, with a shareholder vote next week deciding whether to reinstate Musk's [astronomical $56 billion pay package](). Plenty of investors have since come forward, [urging shareholders to reject the payout](). ## Shopping Spree Perry is tapping judge Kathaleen McCormick, who already has a history of butting heads with the mercurial CEO. It was McCormick who [originally voided Musk's pay package](), determining that Musk and his board had far too much influence and failed to disclose the terms of his compensation to shareholders. By knowingly selling billions of shares weeks before posting disappointing sales numbers, Perry alleges Musk "breached his fiduciary duties" to both Tesla and its shareholders. "Musk profited from his misconduct and his exploitation of material and adverse inside information," Perry's suit argues, pointing out that Musk had said that Tesla was enjoying "excellent demand" and was expecting to "to sell every car we make as far into the future as we can see." Musk's [major Tesla share sell-offs]() — he [unloaded around $22.9 billion]() worth in 2022 alone — helped him fund his ill-advised purchase of Twitter, and have already come under plenty of scrutiny. Just this week, Musk [agreed to testify]() in the Securities and Exchange Commission's investigation into his social media acquisition. The regulator is specifically looking at the Twitter stock he held prior to his purchase, and whether he missed the legal deadline for disclosing these existing standings. Musk already [has a long history]() of [being investigated]() for possible insider trading. When it comes to Perry's lawsuit against Musk, it remains to be seen whether the CEO's suspiciously timed $7.5 billion dump amounts to insider trading. But with McCormick holding the gavel, we're likely in for a wild ride in the courtroom. **More on Tesla:** *[Elon Musk Is Gonna Blow a Gasket When He Sees This Pride-Themed Cybertruck]()* ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()