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  • 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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[-] ThePantser@lemmy.world 283 points 5 months ago

Isn't that the definition of insider trading? Lock him up like Martha, she did way less and served time in a prison resort.

[-] CraigeryTheKid@lemm.ee 51 points 5 months ago

I need to look up how "insider trading" even works.

When you are the CEO, and you make decisions, and you own your own stock - wouldn't everything you ever do be with insider info? It is just honor system pinky-promise to act in good faith? I mean that sounds super effective.

[-] teletext@reddthat.com 109 points 5 months ago

Normally you publicly say looong in advance, like at least half a year in advance, that you plan to sell this amount of shares at this point in time. No more, no less, not earlier, not later, no backsies.

[-] Warl0k3@lemmy.world 62 points 5 months ago* (last edited 5 months ago)

Well no, there is backsies. You can rescind your intent to sell within a couple days. What most CEOs do is set up regular sells every month way in advance, then choose not to sell unless its opportune at the last minute. If that sounds like it completely defeats the purpose of the rule in the first place, yep! The system is rigged.

[-] CleoTheWizard@lemmy.world 17 points 5 months ago

Wouldn’t say completely. The notice of intent to sell is not there to prevent CEOs from selling when they want to, it’s to notify you that they could sell this much if they wanted to.

The purpose is just to say that you need to be prepared for a potential sale. If the CEO keeps backing out of a sale, that does hurt your ability to predict when they will but not how much they could sell and therefore how much those sales could potentially affect your investment.

All of that is strategic because otherwise investors could conceivably do the opposite and sell before the CEO is forced to sell and then buy his shares at a lower price. That would mean the stock would tank every time the CEO went to sell. The problem exists because most of the solutions are even worse

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[-] Aurenkin@sh.itjust.works 51 points 5 months ago

At my workplace we are only allowed to sell stocks within certain windows, usually it's a brief period immediately after we publicly release earnings. I think for higher ups it's even more restrictive.

[-] NotMyOldRedditName@lemmy.world 22 points 5 months ago* (last edited 5 months ago)

We had a 2 week window 2 or 3 days after earnings were released.

Edit: You could preschedule sales though like recurring once a month, but it wouldn't take effect immediately. I can't remember what the delay on that was, but it might have been starting after the next earnings?

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[-] DogPeePoo@lemm.ee 40 points 5 months ago
[-] Johanno@feddit.de 19 points 5 months ago

That's only the 5th time he commits fraud. He has been at court several times because of his actions. It seems no one really wants to arrest him

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[-] FlyingSquid@lemmy.world 19 points 5 months ago

"Felonious Musk" might be a good nickname.

[-] exanime@lemmy.today 18 points 5 months ago

Yes but you see, he is a billionaire... Insider trading and other laws are for the pauper rich

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[-] Spitzspot 122 points 5 months ago

Can we revoke his government contracts now?

[-] ThePantser@lemmy.world 57 points 5 months ago
[-] Ragnarok314159@sopuli.xyz 58 points 5 months ago

Dude, you can’t talk about deporting people back to Africa. Not cool.

[-] pennomi@lemmy.world 22 points 5 months ago

No, that’s counterproductive because the government uses those services. Instead, the government could confiscate his stock in those companies.

[-] TWeaK@lemm.ee 22 points 5 months ago

SpaceX would probably be more profitable if they didn't have to spend so much time and resources on preventing Musk from interfering with things.

[-] pennomi@lemmy.world 10 points 5 months ago

It’s mostly Tesla and Twitter that he’s wrecking, but yeah Shotwell does sometimes rescue SpaceX from terrible ideas he has, like canceling Falcon Heavy.

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[-] Fedizen@lemmy.world 102 points 5 months ago

Martha Stewart this motherfucker.

[-] cosmicrookie@lemmy.world 40 points 5 months ago

So.. i vaguelly knew about her so did some searching

she served five months in federal prison for fraud and was released in March 2005. There was speculation that the incident would effectively end her media empire,[2] but in 2005 Stewart began a comeback campaign[3] and her company returned to profitability in 2006.[4] Stewart rejoined the board of directors of Martha Stewart Living Omnimedia in 2011[5] and became chairwoman of her namesake company again in 2012

Its pretty mild isn't it?

[-] Fedizen@lemmy.world 43 points 5 months ago* (last edited 5 months ago)

except they wont even do that to musk. Nobody wants to try a billionaire in court, musk is known to send armies of private detectives on people. He'll close a factory in your district out of spite. Billionaires are afraid of taxes because as long as they have way too much money they can continue to do the illegal shit that made them rich.

[-] Texas_Hangover@lemm.ee 22 points 5 months ago

And she got street cred, and hangs out with snoop dog now lol.

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[-] exanime@lemmy.today 100 points 5 months ago

How could a CEO of any company trade his own stock from the company and not be insider trading?

The fact they are allowed to control stock is laughable... At best, stock from the company you control should be in a blind trust (which would still be laughable but we can at least pretend)

[-] UnderpantsWeevil@lemmy.world 36 points 5 months ago

The SEC has already proved itself absolutely toothless. Even if it was illegal, who would prosecute?

[-] Michal@programming.dev 32 points 5 months ago

They have to give advanced notice before selling, they can't just sell stock on the whim.

[-] Sabata11792@ani.social 22 points 5 months ago

It was clearly more profitable to break the law than to follow it.

[-] exanime@lemmy.today 16 points 5 months ago* (last edited 5 months ago)

So?... I am the CEO... I know our new line of highly anticipated space tentacle dildos are not going to be in stores by Christmas as expected, I give notice and sell stock before the public finds out and stock goes down

I also know, because of the delay, we are squeezing the Chinese manufacturer, so I will give notice and buy the stock in January knowing we are probably going to offer deep discounts to get those consumers back

How is giving advance notice any safety? unless the rules say they need to give 500 days of notice or something long enough there is no possible way to predict properly with ALL the information and power a CEO would have to manipulate the stock

I don’t want to defend CEOs here, but there is a code for in the USA, Rule 10b5-1, which sets out a CEOs stock trading plan.

The reason, if you’re not Elon Musk, is that most CEOs are paid in stock and so it’s inevitable they’re going to sell some. So they set out a plan to say I will sell X shares on X date and the market shouldn’t be spooked.

What Elon did here is sell 45 million shares, seemingly outside of any plan, which is insane. Usually they wouldn’t be offloading such a volume.

Selling a small amount of your stock doesn’t indicate you don’t have faith in your own company, but more that you want to convert some of your reward (pay) into actual cash.

I’m not saying the system is good, just that this is how it works.

[-] exanime@lemmy.today 8 points 5 months ago

I’m not saying the system is good, just that this is how it works.

Totally get it... which is why my comment was intended to mean "what the fuck kind of system is this"... not "Elon bad"... although, yes, Elon bad ;-)

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[-] cyborganism@lemmy.ca 84 points 5 months ago

This is bullshit. My EV ETF is not doing well and I'm losing my investment while this jagoff gets to sell his stocks ahead of the announcements and runs away with the money? Fuck that shit.

Shareholders should fucking sue if the government ain't gonna arrest him for insider trading.

[-] KillingAndKindess@lemmy.blahaj.zone 19 points 5 months ago

I wish I knew money enough to actually understand your comment, but here we are, both hating Elon and wanting him dealt with. Its beautiful really.

[-] cyborganism@lemmy.ca 23 points 5 months ago

An ETF is an investment fund made up of stocks from different companies. A fund based on electric vehicle market could include Tesla, Chevrolet, Toyota, Ford, Kia and various other companies building EV parts like BASF or Northvolt for batteries or chargers.

The fund could be composed of, say, 30% Tesla, 10% Chevrolet, 10% Kia, 5% Ford, etc.

You can invest in the fund by purchasing parts, which then give you a return based on how many parts you bought and the performance of the stocks in the fund.

Does that make sense?

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[-] r00ty@kbin.life 10 points 5 months ago

If you're using the ETF as a long term investment and you believe EVs are key to our future then you shouldn't worry about this too much (unless the ETF is made up of mostly TSLA in which case I'd not be too happy).

You've not lost money until you take it out of your investment.

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[-] cosmicrookie@lemmy.world 77 points 5 months ago* (last edited 5 months ago)

That title is a very long way of saying that he's been accused of inside trade

[-] IHeartBadCode@kbin.run 53 points 5 months ago

Forgot the final bullet points

  • US Government does jack shit in terms of legal ramifications for breaking law.
  • Musk pledges to break US law once again.
[-] Skkorm@lemmy.world 41 points 5 months ago

That's called Insider Trading, and is supposed to be illegal.

America

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[-] set_secret@lemmy.world 35 points 5 months ago

What a joyous year if we could get Trump and Elon in jail this year.. They could be roomies!

[-] UnderpantsWeevil@lemmy.world 33 points 5 months ago

Neither of them are going to prison. Trump's judge explicitly said as much during his 10th contempt citation, and Musk has been pissing on the leg of the SEC for the last five years straight with no consequences.

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[-] some_guy@lemmy.sdf.org 34 points 5 months ago

Lonnie wouldn't break investing rules. I trust him. He's a super genius and will save us all. Now let me go post racist bullshit on his everything app so people will think I'm cool.

He's a shithead. There will never be meaningful consequences. I hope he takes a rocket into space and never comes back.

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[-] suction@lemmy.world 33 points 5 months ago

Used to be you pull this shit (insider trading) and be locked away for life. Times they 'r a changing, indeed.

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[-] njm1314@lemmy.world 23 points 5 months ago

When are Tesla shareholders going to wake up and understand that he's scamming them. You're all dupes and he's going to ride you to the last second and let you all burn.

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[-] Ballistic_86@lemmy.world 22 points 5 months ago

Insider trading seems to have been perfectly legal for the last few decades. Nothing will come of this or it would start setting precedent that we could use against our government leaders and other billionaires and federal judges. Not gonna happen.

[-] asteriskeverything@lemmy.world 21 points 5 months ago

Punish him daddy

[-] PsyDoctah9Jah@lemmy.world 13 points 5 months ago

.... WHAT'S New in Capitalism......

🫠

[-] HurlingDurling@lemmy.world 8 points 5 months ago

So wait, is it OK to do INSIDER TRAIDING now?

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[-] SonnyVabitch@lemmy.world 7 points 5 months ago

Wouldn't that volume for sale appearing on the market decrease the price in and of itself?

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this post was submitted on 05 Jun 2024
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