Tesla CEO Elon Musk has been accused of reaping about $3 billion in illegal profits through insider trading of the company's stock.
A shareholder lawsuit alleges that Musk sold more than $7.5 billion worth of Tesla stock because he knew the electric vehicle maker would miss its fourth-quarter production and delivery goals in 2022, according to reports Friday.
The world's richest person — who's reportedly spoken with former President Donald Trump about a potential advisory role if Trump beats President Joe Biden in November — allegedly made the trades in November and December 2022 before the numbers were made public on Jan. 3, 2023, prompting a plunge in Tesla's share price.
If Musk had waited until then, he would have netted "less than 55% of the amounts realized from his November and December 2022 sales," plaintiff and shareholder Michael Perry said in court papers filed Thursday in Delaware Chancery Court.
"Musk exploited his position at Tesla, and he breached his fiduciary duties to Tesla," Perry alleged.
The lawsuit, which seeks to recover the money Musk made on the trades, also accuses the company's directors of breaching their duties by allowing the billionaire to sell his stock.
Musk and Tesla didn't respond to requests for comment, Reuters said, and Musk lawyer Alex Spiro didn't answer an email inquiry, according to Bloomberg.
Musk, whose wealth is estimated at $210 billion by Forbes, sold the stock to bolster his $44 billion purchase of the social media company Twitter, now called X, in October 2022, Bloomberg said.
The lawsuit against Musk was filed two weeks before Tesla shareholders are set to vote on his $56 billion-a-year pay package, which was voided in January when a judge ruled that he improperly controlled the process that set the amount, according to Reuters.
It also came a day after Musk agreed to testify in connection with a Securities and Exchange Commission probe into his purchase of Twitter stock before the company's board accepted his offer to take the company private in April 2022.
Musk has called the regulatory action an attempt to "harass" him through unwarranted investigations.
