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Musk accused of selling $7.5 billion of Tesla stock before releasing disappointing sales data that plunged the share price to two-year low (fortune.com)

submitted 5 months ago by TVgog56789@lemy.lol to c/usnews@lemy.lol

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cross-posted from: https://programming.dev/post/15086231

Elon Musk accused of illegally selling $7.5 billion in Tesla stock in Q4 2022.

Lawsuit alleges Musk and board violated fiduciary duties by selling shares ahead of disappointing vehicle sales data.

Shareholder seeks disgorgement of $3 billion in illegal gains and damages from directors for reckless behavior.

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[–] Neato@ttrpg.network 38 points 5 months ago (2 children)

I don't understand why people who have insider knowledge are ever allowed to sell or buy that stock. Seems made for corruption.

[–] RedditWanderer@lemmy.world 10 points 5 months ago

Normally they will hand off all the stock trading to a third party so there is no conflict.

[–] TVgog56789@lemy.lol 6 points 5 months ago (1 children)

You can't stop promoters from trading their own stock but there are strict rules for them.

They cannot make a trade based on insider information before it's Public.

[–] Neato@ttrpg.network 2 points 5 months ago (1 children)

Well clearly they can. They'll always know things before they happen that will affect the stock price.

[–] TVgog56789@lemy.lol 1 points 5 months ago

They have to eventually make that information public and SEC will track the large buy/sell order taken place before the information is public.

So it's pretty quick and easy to catch them if someone wants to.