Investor files lawsuit against Tesla after Musk tweets on 10% stock sales

On Thursday, investor David Wagner filed a lawsuit against Tesla with the Delaware Court of Chancery. The suit is not against Musk but he wants to get access to records and books related to Musk’s tweets. These include documents that that would identify whether the stock sales tweets were reviewed or had been pre-approved in advance, according to a report by Reuters.

According to a report by Bloomberg law the suit notes that it was “unclear, who at Tesla, if anyone, is currently reviewing Musk’s tweets” after the full-time general counsel of the company left in December 2019 and the newest acting general counsel left in April.

The suit also claims that there is a “credible basis” that indicates that the company is “being mismanaged.” It also claims that Musk continues to post on Twitter and social media about matters that have an “impact” on the stock price of Tesla.

In 2018, Elon Musk had settled a lawsuit by the Securities and Exchange Commission by agreeing to have his lawyers pre-approve tweets that contained material information about Tesla. This agreement was reached after he had tweeted about the company going private and the SEC sued him for “false and misleading statements.”

Earlier lat month, Elon Musk had set up a Twitter poll asked his millions of followers whether he should sell 10 percent of his shares in the electric vehicle company. A huge percentage responded saying “yes.” At that point of time, Tesla shares were at a record high.

On November 6, after Elon Musk said that he would sell 10 percent if Twitter users said yes and as they said yes, he began selling his shares and the stock price fell. Elon Musk has sold about $14 billion of the shares that he owns. His brother reportedly sold Tesla shares, a few days before the Twitter poll, when the shares were at a high point.

 



In March, another shareholder had sued Musk and the board. He was accused of violating the 2018 settlement he reached with the SEC and for exposing the shareholders of Tesla to losses that amounted to billions of dollars.


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