Elon Musk faces insider trading allegations from Tesla shareholder in lawsuit

A Tesla shareholder has filed a lawsuit against CEO Elon Musk, alleging he committed insider trading by selling shares just before production slowed.

Michael Perry filed a lawsuit against Musk selling his shares in November and December 2022. During this fourth quarter, Tesla delivered more than 405,000 cars, representing 40% year-over-year growth, despite a decline in November.

However, Perry claims that Musk would have lost 45% of his stock value if he had sold his shares after November production and delivery data was made public. Stock prices fell from around November 4, when they were above $228 per share, to just over $113 the next January, before rising again.

Perry filed suit in the more than 220-year-old Delaware Court of Chancery. On its website, it describes itself “as the preeminent national forum for resolving disputes involving the internal affairs” of various companies across the country.

“His unique skill set and exposure to business law issues is unmatched,” the website reads.

This is the same court where a judge last month denied Musk's $56 billion in compensation in a lawsuit filed by one of Tesla's shareholders. Since then, Musk has been pushing the company to no longer incorporate Delware. Musk has already reincorporated his company SpaceX in Texas after initially being incorporated in Delaware.

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THE Washington Examiner has contacted Tesla for comment.

Musk sold those shares, which Perry said earned him some $3 billion in insider profits, as part of his purchase of social media platform Twitter. He then sold more shares in April and August so he could pay the $44 billion price tag.